Every landlord wants to raise rent. Great operators know when not to. The right renewal number balances current market rent, tenant quality, turnover cost, and long-term property strategy.
The renewal math
Assume a tenant leaves rather than pay an increase. The cost of turnover — vacancy, make-ready, leasing fee, potential concessions — often exceeds a full month of rent. A $75 monthly increase that triggers a move-out can take a year or more to recover.
A framework that works
- Pull current comps for your specific submarket.
- Assess the tenant: payment history, care of the property, communication.
- Offer a renewal at or slightly below market for great tenants; hold or increase modestly for others.
- Communicate early — 60 to 90 days before renewal — and in writing.
The long-term view
Stable, long-tenure tenants are the foundation of a strong rental portfolio. Retention is almost always more profitable than a modest rent bump.
