How to Plan Your Rent Escalation

Rent escalation can be assessed if a property is improved or if inflation has increased. Rent escalation is intended to adjust the payments to a current fair market value. As such, any landlord who is looking to raise rent should be able to show the current value of the apartment or home is greater than the current rent.

Research Comparable Rents

Comparable rents are the best way to assess the market value of a property. Look for listings that have the same number of bedrooms and bathrooms in the same neighborhood. It is rare to find a completely comparable unit. Therefore, it is important to adjust for factors like more or less square footage, new appliances, a bigger yard or other features.

Provide Written Documentation

When it is time to tell a tenant rent will be escalating, it is best to do so in writing. Enclosed in a letter, include research that has been done on comparable values. Based on this information, quote a new rental price in writing. Date the letter, and include a date when the rent will escalate. This date should be at least 30 days from the date of the letter. Writing this information down will ensure your tenant notifies the landlord if he or she intends to move out.

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