As the old saying goes, “time is constant, change is inevitable”. In multi-family, raising rent is inevitable. No matter how you feel about that friendly resident in apartment 3B, you have a duty and responsibility to look after the owner’s asset. That includes maxing out the rental rates for a profitable ROI. Failure to keep up with demand and the current economy will only burden your community from prospering, not only in the short term but long term as well. You are entrusted to keep your property performing at its fullest potential. A well performing property benefits both the owner and the resident (not to mention job security). To keep a property performing at its fullest, will at times, call for raising rents on your residents. Just keep in mind, that when you raise rents you will want to create and join in an open dialogue with your residents.
You must make sure to keep the dialogue a positive one. Maybe the rate increase is because of gas and electricity prices have gone way up, or that your taxes are higher. Maybe it is the improvements you made last summer that you are trying to get paid off or the city’s raising rates for water service. Whatever it is, keep your residents informed. Residents are willing to pay more when they know that they are getting more.
Also, don’t be afraid to deliver the rental rate increase personally. By delivering the news personally you will engage the resident and be able to show your compassion and conviction for the increase. You will also be able to explain, although you hate to do it, it is essential for the community as a whole. Let the resident know that you want to provide the best environment you can for them and everyone in your community.
“Residents are willing to pay more when they know that they are getting more.”-Justin Bryan
This open dialogue with your residents will establish strong and healthy relationships. Always open up and be transparent. The resident will develop confidence in your integrity, your motives and your goodwill. By doing this, you dispel the evil stereotype of a greedy landlord and build a trust that will enable your residents to be open to rental increases that they originally perceived very differently. Your residents will learn that they can count on you to do what you say and they will know that you have no personal, hidden agendas; and they will believe that you care about their interests as well as your own.
So before you send out that higher rental rate renewal, make sure you have created an avenue to an open dialogue and always, make sure to keep the dialogue a positive one.
“You must make sure to keep the dialogue a positive one. ” Justin Bryan
Meet Our Guest Blogger: Justin Bryan is a Property Manager of 320 units in a submarket of Nashville, TN. Justin’s multi-family career started in 1999 as part-time leasing consultant. After graduating college, Justin continued to pursue his interests in multi-family industry by acquiring a position as Property Manager. Always looking out for the bottom line, Justin is known for eliminating concessions and increasing value in properties. Justin holds a B.A.A. in Marketing from Middle Tennessee State University.Connect with him on his Linkedin Profile: http://www.linkedin.com/pub/justin-bryan/17/659/7b8 
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