Being a landlord hasn’t been easy over the past couple of years. Not that it’s ever entirely easy, but local and federal pandemic mandates and eviction moratorium made it harder to even collect rents, let alone raise them.
But according to recent survey data highlighted in this Realtor Magazine article, landlords plan to substantially raise rents this year, and all signs point to tenants being willing and able to pay higher rents.
Here’s a look at how much surveyed landlords are planning on increasing rents by in the coming year:
- 38% plan on increasing by 5% or less
- 45% plan on a 5-10% increase
- 9% are planning on a 10-15% bump
- 5% are seeking a 15-20% hike in rent
- 3% are asking for an increase of 20% or more
The amount your market and tenants will be able to bear has to be taken into consideration, but overall the article cites that 82% of renters have not missed a payment in the past 12 months, showing that the majority of tenants are able to pay regularly and stay current. Seventy-seven percent state that they do not anticipate missing a payment in the next three months to a year.
Coupled with low supply of houses for sale (especially in the entry-level markets) and rising interest rates, demand for rentals should be high.
If you’ve struggled to collect rents and pay your mortgage over the past few years, and are thinking about selling your rental property, you may want to reconsider. If you can, hold on to your rental property and raise your rents as much as the local market will bear.
If you haven’t been struggling, but you’ve been hesitant (or unable) to raise rents in the past couple of years, consider raising the rent as leases come up for renewal, or when accepting a new tenant.
And if you haven’t already invested in rental property, now may be the time to buy one, before rents are raised which will increase the market value and cost to buy one.