The state of Nevada does not put a limit on how much you can raise the rent for your property in the landlord-tenant laws. As a property owner, this means you can increase it as much as you would like. However, you should be mindful to raise your rent by a reasonable amount.
Further, you need to give your tenants 45-days’ worth of notice before you increase the rent. This notice must be written and either hand-delivered to your tenants or sent by mail. If your tenant pays rent on a weekly basis, you only need to give them 15-days’ worth of notice.
In this post, we’ll cover the reasons you may want to raise the rent and how to make the proper decision on how much to raise your rent by. Understanding these things will help you make better decisions when it comes to your rental price so that your property can stay competitive on the local rental market.
Why Should You Raise the Rent?
Raising the rent is one of the quickest ways to increase your return on investment. The resulting increase in monthly cash flow can also help you to make more investments in the future. Other common reasons for increasing the rent include:
1. To stay competitive in the local market.
As a landlord, if you see that prices for comparable rentals in your local area are increasing, you may want to increase yours as well. Staying on top of new market trends will make sure that your rental property stays competitive.
2. To cover the cost of rental property improvements.
If you decide to make considerable improvements or renovations to your rental property, this can justify an increase in the cost of the rent. Any serious rental improvement will impact your property’s value. Your tenants will be living in a more valuable property which will, therefore, cost more for rent.
3. To cover the cost of bigger expenses.
During a renter’s tenancy, the associated expenses of owning a rental property may increase. This may be for things like property management fees, taxes, insurance costs, or mortgage interest rates. By adjusting the cost of the rent for these situations, you can ensure you’re not running at a deficit.
How much should I raise the rent?
The proper amount to increase your rent will depend on the underlying reason that you are raising the rent. You may find that determining the answer is challenging if the insurance fees increase, but the rental prices in your area are plummeting. Let’s take a look at several of the ways you can approach this matter:
1. Do your research
You need to have a solid understanding of what’s going on in the rental market. Sometimes it’s impossible to just look at an increase in an associated cost of owning a rental property and drive up the cost of rent accordingly, especially if comparable rentals are lowering their cost of the rent.
Talk to landlords with comparable rentals in your local market. You may learn that they have been in a similar situation as you. Find out what sort of rent adjustment strategy they used to tackle the challenge.
2. Crunch the numbers
Determining the right rent increase isn’t something that should involve too many emotions. It’s a statistical issue. You need to pull all of the data relating to your decision and fill out a spreadsheet to make sense of the numbers.
Ask yourself questions like how much minimum return do you expect on your rental investment? What are your annual expenses going to be? Play out scenarios with varying degrees of rent increases to see how your finances would turn out. This will help you make a better decision for yourself.
3. Experiment with higher prices
Begin by raising the rent as high as you think you can without driving away potential tenants. It’s always possible to decrease the price later on when you see that the market isn’t responding favorably.
How can I improve my property to increase the rent?
Making property improvements is one of the most solid strategies for justifying a rent increase. If you’re considering doing this, try one of the following strategies:
1. Reconfigure the property
The reconfiguration approach works best for large units. You may have the chance to divide your property and create more units than before. In this case, it’s possible to enjoy a mix of long-term and short-term tenants each paying different rent prices.
2. Offering new services and appliances
By including appliances such as washers, dryers, TV sets, and microwaves, you can increase the monthly cost of rent for your property. This will also upgrade your tenant’s experience, making them happier in the long-term. This will help you lower your vacancies and lower the risk of tenants breaking their lease.
You could also bundle utility services like WiFi connection and cable TV. Bundling these services up as a package makes your tenant’s life easier and is easy to sell as part of the rent price.
3. Upgrading and remodeling
Making improvements to the physical space of your rental is a tried and true method for raising the rent. While brand new fixtures may not always justify a significant rise in rent, big remodeling projects definitely do.
Extensive remodeling works when you have time between a tenant’s move-out and move-in. Just make sure that the improvements you’re making reflect the market conditions. The prospective renters need to have an actual interest in a more upscale kitchen or bathroom.
Raising the rent on your Nevada property is a great way to boost your rental income and invest some extra money in new ventures. However, you should keep in mind the basic principles of a rent increase before committing to any changes.
Every rent raise needs to have a real justification
Making improvements to your rental property is a solid reason for increasing the rent
Conduct plenty of research to ensure that the raise in rent will be welcomed by the rental market under the current conditions
As a rental owner, move-outs are a perfect time to adjust the rent. You won’t have to deal with emotional reactions nor potential negotiations. If the market situation has changed since your last move-in, it’s time to adjust the price.
If you have more questions on raising the rent of your Nevada rental, contact Evolve Nevada. We can help you determine the correct price for your rental property.