How and When to Raise Rents in Apartments and other Residential Properties in Los Angeles

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How and when to raise rents.

Don't raise rent during the first year of occupancy. Doing so creates a bad rapport with the tenants. Since people don't like to move, small rent increases every 6-9 months after the first year, should only be done if your rental rate is below the market.

Tenants don't like prolonged pain. Every small rent increase is like a pin prick. Q: Should I make several small rent increases or one large one? A: Several small rent increases, as long as there is nothing better in the area at the same price. It pays to know the market. Get to know your neighbor's prices.

Another way to raise rent is when one tenant moves out, and you renovate the vacant unit and raise the rent before moving the next tenant.

Rent concessions in case the tenant is willing to sign another year-long lease. A great way to keep good tenants is to offer them to sign another 1 year lease, with a signing bonus of a few hundred dollars to two weeks free -- depending on the market.

You can also raise the rent if you are tired of the tenant not paying on time, as long as the tenant is on a month-to-month.

You should raise the rent if the tenant is paying below the market. This is also true in the rent-controlled properties, the only difference is that in rent-controlled properties, you may only increase the rent by no more than 3 percent per year.

You can give rent concessions in order to keep the property fully occupied. In other words, "I see that you have lived with us for 12 months, and we think you are a great resident of this building. We will give you a $500 discount if you sign a 12-month lease." This keeps them from moving for another 12 months. Similar strategy can be applied if you get a 30-day notice. You should inquire about the reason for the move, if it is price-related, you can make the same offer, if husband and wife broke up, you must accept that some things, are beyond your intervention.

As far as retaliation laws are concerned, try to avoid raising the rent after a tenant sues you.

The easiest way to raise rents is to make the property look great between the tenants and to re-rent it for a higher price. Some of the features that enable you to raise rents are:

Please keep in mind that the law of diminishing returns is in play -- every additional dollar invested in renovation enables you to raise the rent by an ever-decreasing amount. Examine if people renting in this area are willing to pay more for an nicer-looking apartment. Depending on the location of the property, and the square footage, any invesment may not pay for itself.