Austin Property Management Blog

Should You Raise the Rent on Your Austin Rental Property Every Year?

System - Tuesday, December 10, 2019

Raising the rent on your Austin, Texas rental home can be a delicate art. If your rents rise too much you could force tenants out and could have trouble finding new occupants on the open market. If you don’t raise it enough you could be stuck with a property that doesn’t turn a profit for the duration of the lease. So how do know how much your rent should increase every year?

Rent increases are a part of life for both landlords and renters in Austin, TX. When expenses that owners have no control over raise so does the amount of rent they are charging. These types of unavoidable expenses include:

A rise in property taxes for your property

A rise in HOA fees in your neighborhood

Cost of utilities in your area rising

Austin property management fees

Costs for landlord insurance

If you aren’t raising the rents when your expenses go up you’re effectively giving yourself a pay cut. However, if the thought of raising the rent or asking for more money from your tenants makes you cautious your best bet is to run the numbers! You can receive a free rental market analysis for your Austin, TX rental property to learn how much your property should be renting for. These reports are done by someone with knowledge of the Austin rental market and all of the data is based on what the Austin rental market is currently offering!

Your personal expenses DO NOT determine your property’s rental rate.

One thing Landlords need to keep in mind when wanting to raise the rent of your Austin, Texas home for rent is that your expenses don’t set the market rent.  Let’s say you needed to replace your home’s roof this past year. This is an expensive project and can put a dent in anybody’s pocket. Some landlords may choose to set their rent amount higher to try and offset the cost of this repair. This is a no-no and it can result in your property sitting vacant if you’re charging more than the comparable properties in your area. If the costs of doing business (roof repair) outweigh your means to do the repair you may look at offloading your property!

As an Austin, TX landlord, you are allowed to make money!

Owning a rental property is a bit like owning your own little business and as a business owner, your first priority is turning a profit. Even if you haven’t experienced a rise in uncontrollable expenses on your end your property can still be subject to a rate increase! The best way to know how much you can raise your rent is to have a professional market analysis done for your rental property if you aren’t able to run the numbers yourself.

How much of an increase in the rent amount makes sense?

Let’s start this off by saying that most rental hikes are inflationary. Never will you be able to tack on $100 to your rate and not be harming yourself in the rental market (unless you were way below market rate to start with). An extra $1,200 a year is enough to help a tenant decide between your property and the next. Any increase in rental rate needs to be done so that it competitively positions your Austin rental home in the market and exposes your property to the largest pool of qualified tenants possible. An increase of 2-5% is more common and is more manageable for tenants compared to a hike of 10-20%! If you plan on making an increase to the rental rate you want to make sure you aren’t hurting yourself in the marketplace to do so.

Austin Property Management & Rental Increases

If you choose to partner with an Austin property management company on your rental home(s) they will typically increase your rent every year with what the market allows. Before the renewal of your lease every year your Austin property manager should be performing a market analysis to ensure you are receiving the max rental rate for your rental property.

Exceptions to the Rule

Is there ever a time you wouldn’t want to increase the rent even though the market allows you to do so? The answer is complicated and comes down to personal preference. Let’s imagine you’ve had a renter in your property for the past 2 years and they’ve been perfect – never missed their rent, on top of maintenance, easy to work with, etc. Some landlords choose to reward loyalty from their tenants with lower rent prices. Raising the rent could force those tenants to vacate and go elsewhere so some landlords trade-off the rent increase for keeping A+ tenants in their property. In the end, it’s up to you – the landlord.

For any questions about Austin rental home or property management services don’t hesitate to contact Stone Oak Property Management.




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Stone Oak Property Management
13497 N Highway 183, Ste. 700
Austin, TX 78750

Phone: 512.617.6766
Toll Free: 888.892.7940
Fax: 512.994.2300

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