Landlords and property owners who had a difficult time navigating the pandemic and the rent moratoriums imposed upon them for the past two years may finally be getting some relief as rent increases are now allowed to proceed once again under multiple state and local laws of California. For some areas, that increase may be as high as 10% beginning in the fall of 2022, which is the maximum allowed by law. Some property owners may be exempt if they own a single-family home and the property owner is not a REIT or Corporation disclosure addendums are required to reserve the exempt status. That number can vary from one city to the next as the cap is set at 5% plus an additional percentage based on the current rate of inflation.
As a landlord, you set your rent prices at specific amounts based on factors like property value, maintenance costs, your own income needs, and the average costs to rent similar properties nearby. However, just because you’ve set the perfect rent price once doesn’t mean it should stay at that amount forever.
Why and when is it needed for a rent increase on your property? Whether you work with your tenants directly to agree on a rent increase or decide a fair amount yourself and present it in a rent increase notice, it’s important to provide your tenants with detailed information about why rent must increase. Property tax issues are often represented on the ballot in local elections. If your city has recently voted to increase property taxes, you’ll need to increase your rent to reflect your new expenses as a property owner. When the cost-of-living increases in a city or neighborhood it affects everyone, whether they’re a renter or a property owner.
When you make improvements to your property, you increase its value and improve the overall experience of your tenants. Therefore, you’re at liberty to increase what your tenants are paying in rent to reflect the improvements and to cover any heightened maintenance costs you’re now responsible for. When neighborhoods become more desirable, the rent is expected to rise. If your property’s neighborhood has increased in value, you can incrementally increase your rent prices even if you haven’t made any particular changes to your own property to help you budget for future capital expenditures such as roof and plumbing repairs.
-by Brie Camacho