At MartelTurnkey, we sell our turnkey rentals in St. Louis and other markets with paying tenants in place. Market rents come with the deal, too. We work with local, vetted property management companies to calculate the highest rents possible when those tenants are signed. Still, over time, it makes sense to consider raising the rent on your turnkey rentals in Detroit, or whichever market you’ve invested in. You can usually only raise rent on a new lease, but what are the other conditions and situations when you should raise the rent?

 

Once a Year is Reasonable

 

Once a year it’s reasonable to raise the rent. In a year, prices are likely to have risen, and that means that local rents have probably gone up, too. It’s a good idea to take a look at the rents you’re charging across all of your turnkey rental properties at least once a year, to see if a rent increase is warranted.

 

When the Lease is Up

 

It’s usually a good thing when your tenant asks to sign a multi-year lease. We even have some turnkey rentals for sale with signed multi-year leases already in effect. A multi-year lease means you don’t have to think about your property management company getting in a new tenant for a while. And, tenants with long-term leases tend to be more stable. The downside to multi-year leases is that you can’t raise the rent until the lease is up. You always have to wait until the tenant signs a new lease, with the higher rent quoted. That’s okay, though. If you have a one-year lease in place, you can raise the rent at that mark. If you have a multi-year lease, you can always raise the rent according to current market rates when that lease is up.

 

When Market Rates Go Up

 

Speaking of market rates, you should always raise the rent so that you’re charging somewhere in the range of what’s being charged in the area. If you have a long-term, paying tenant and you choose not to raise their rent due to some compassionate reason or extenuating circumstances, that’s fine. But if you’re getting a new tenant, you don’t want to charge too far below market rates. Why? Because then your rental property will appear to be less than the other available rentals. Quality applicants may assume that there’s a reason the rent is so low. Surprisingly, instead of going for the place with the cheap rent, they’ll pay more for what they assume is a better rental property. Then, the applicants you will get may be of lesser quality because they don’t care where they live or what conditions they live in. So keep your rents in line with market rates.

 

When Improvements Have Been Made

 

If you have made significant improvements to your rental property, it makes sense to raise the rent. Improvements like putting in a new faucet or fixing the furnace don’t count. We’re talking about adding something of high value, like adding a carport or re-seeding the lawn, or finishing a previously unfinished basement. If you’ve made a major improvement like that, a higher rent is certainly warranted. When you buy a MartelTurnkey property, the property is already fully renovated, so no new improvements will be needed. But down the line and through the years, you may see fit to make a big improvement.

 

Our advice is to rely on your property management company to guide you as far as deciding when to raise the rent. That’s because the property management company is managing the turnkey rental property every day, is on top of market conditions, and is fully knowledgeable about how and when rents can legally be raised in whatever city your property is located in. If you feel a rent increase might be a good idea, talk it over with your property management company and any needed changes can be made at the next lease signing.

 

 

 

Customer Testimonial:

 

“It was truly a pleasure partnering with MartelTurnkey on the purchase of two rental properties in Memphis. These were our first out of state rental properties for my partner and I. Although we’ve never visited Memphis, Antoine ensured that we were connected in every stage of the process.”

~ Sabrina & Lashawn, Plainfield, NJ