Increase Your Rental Income – Without Renovations

Let’s talk about increasing your rental income when you have an existing long-term tenant without completing any renovations at the property.

Hi there, Keyspire Community. My name is Amanda. I’m Keyspire’s Senior Manager of Coaching and Content. In today’s video, I’m going to teach you about increasing the income at your rental properties, and more specifically, we’re going to talk about increasing your income when you have an existing long-term tenant and you’re not going to complete any renovations at the property.
 
Now before we dive into all these details, I think there’s an important acknowledgement that I should talk about. Now it’s always going to be the landlord and tenant legislation within your area that is going to govern your provincial legislation or if you’re in the US it will be your state legislation that will dictate the rules and guidelines for any sort of rental increases.
 
All real estate investors are required to become familiar with the legislation in the areas that they invest. Okay, so I wanted to provide you guys with a very quick and basic case study here. Now, I’ve heard landlords say before in the past that they don’t actually perform rental increases annually because the allowable annual increase is so small, so they just don’t care about it.
 
So what I’ve got here is an illustration of if there’s a base rent that is starting at $1,500 per month. What is the increase over a 10 year period? So you can see on my chart here, I’ve got the years from 2010 to 2020 and I’ve outlined what the allowable increase is over all these years. So these are real numbers that Ontario has allowed over the years. And then what does that equal to be for the monthly increase and then of course, the new rental amount. So over a 10 year period. The total increase is almost $4,000. Okay. So that’s for you to decide. Is $4,000 substantial enough for you to do the increases?
 
I would say yes.
 
Now, how do you go about managing these communications? Now I would suggest using electronic reminders and using your calendar on your computer or using your calendar on your phone to set yourself some reminders. Okay? So if you’re using just, a calendar that’s hanging on the wall, maybe you don’t have enough months left in the year to actually give yourself that annual reminder.
 
So this is how I like to do it. That that I like to give myself more than the 90 days, of course, to remind myself to draft up the paperwork, make sure that I have it sent to the tenant in the appropriate period of time so that they’ve got that 90 day notice before their rent is actually going to increase.
 
So you can include a letter with it, and I would always suggest that you do, instead of just delivering the N1 notice, it can look a little bit harsh. And it doesn’t have that customer service element that we at Keyspire and myself always want to try and implement while you’re running your property management business.
 
In your letter you wanna include a couple basic points that your lease is approaching renewal, assuming it’s a one year lease of course. As of such and such date and let them know that you value your landlord and tenant relationship. Again, your tenants are your customers and you should be treating them as such.
 
And then you can outline some renewal options for them. And then of course, include the rent increase notice as well. So I’ve provided here an example of a tenant letter to, again, soften the blow, I guess you could say, for increasing your tenant’s rent, giving them a little bit of an explanation here as well, so you guys can copy this exact if you like it, or you can customize it towards your own language.