Increasing rental rates strategically and reasonably at lease renewal time is one of the best ways to maximize your income. But it’s also a delicate balance, especially since you don’t want to lose your tenant.

As professional property managers in Charlotte and the surrounding areas, we spend a lot of time helping rental property owners decide how to strategically increase what they’re asking. We’re sharing some of the things we think about when we’re making recommendations about rental increases.

Start with Market Research

It’s the market that’s going to drive your rental increase, more than anything else. And, you’ll likely be tempted to take a look at the online rental sites for an understanding of what rental properties are currently going for in your market.

Do better, and talk to a property manager. We collect data that’s far more reliable than what you’ll find on Apartments.com or Zillow. We have specific insights that target exact neighborhoods and property types. We’ll be sure we’re comparing your property to those like it, and we’ll show you the market trends we’ve been reviewing from quarter to quarter.

We need to know whether your current rent is above market rates, below market rates, or comfortably where it should be. That’s our starting point.

Understand Your Tenant’s Value

This is an important factor in how you decide where you want your rent to land. If you have a good tenant in place who is paying rent on time, taking care of your property, communicating easily, and contributing to a peaceful and professional rental experience, you should be in no hurry to chase them out of your property with an unreasonable rent hike.

Ask yourself how much you’d like to keep your tenant. Ask yourself how much you’d like to avoid the cost and the logistics of a turnover.

Avoiding the cost of vacancy, cleaning, marketing, and other turnover expenses could easily outweigh the benefits of a higher rent. Turnovers can range from $1,000 to $3,000 or more per unit. If your rent increase would only net you an extra $600 per year, retaining a good tenant with a minor rental increase could actually be more profitable.

Time a Rental Increase

Because you have a lease agreement in place with your tenants, you cannot simply raise the rent on a whim at any point during the tenancy. You’ll have to wait for the lease to renew. You’ll also want to provide plenty of notice. Here are our best practices around timing:

Notify Tenants Early. Send a lease renewal offer 60 to 90 days before lease ends. This gives tenants time to plan, and it also reduces surprise and stress.
Leave Room for Negotiation. Your tenant might be willing to pay a higher rent if you agree to a new appliance. Be willing to hear what might induce your tenant to stay.

If you can, align your lease cycles with peak rental seasons (typically spring and summer), which gives you leverage for higher pricing and quicker tenant placement in the event that your existing tenant does decide to leave.

Make the Increase Justifiable

When you increase rent, tenants naturally ask: “Why?” They’re not often surprised that the rent is going up, but they’re less likely to push back if they understand your methodology.

Point to rising property taxes, insurance, or utility costs (especially if you cover any of them).
Reference upgrades or improvements you’ve made, whether you’re providing new appliances, better landscaping, or offering fresh paint.
Cite the competitive market rate, but emphasize how you’re still pricing slightly below to show fairness.

Transparency with your tenants builds trust. A simple, polite explanation can dramatically reduce tenant resistance and make the increase feel reasonable.

Keep Your Increase Within Reason

You want to be profitable. However, a “reasonable” increase is typically between 3% and 8%, depending on market dynamics and how underpriced the current rent is. In hot markets, landlords might push higher—but there’s always risk in going too far, too fast.

Showing tenants that it’s still more cost effective to renew the lease agreement, even with the increase, can help.

Here’s an example. Let’s say your rent is currently $1,500 per month. You’ve reviewed the data and market rents are at around $1,650. Instead of raising your rent 10% in order to meet that market average, why not raise it to $1,595? Your tenants will understand and appreciate that you didn’t raise the rent as high as you could have.

Over time, these incremental increases compound nicely, without triggering the churn of high turnover.

Add Value, Then Raise the Rent

One of the most effective ways to justify a rent increase is to improve the tenant experience. You can install smart thermostats or keyless entry to introduce some smart home technology into the rental experience. If in-unit laundry isn’t already available, consider installing a washer and dryer. These actions will not only support a rental increase, they’ll also keep your property competitive.

Even spending $500 on new window blinds and paint can justify an increase while also helping you retain a tenant who might otherwise leave.

Communicate Clearly and Professionally

`How you deliver the news matters just as much as the amount. Send a formal letter or email to your residents. This is not the time for casual texts or social media messages. Keep your communication polite, professional, and direct. There’s no need to dance around a difficult subject.

Include the reason for the increase, the new rent amount, and renewal deadline. Remain available to answer questions or discuss concerns.

You’ll be helped when you maintain a tone that reflects partnership, not power.

Even a reasonable rent increase may receive some resistance. Be ready for it. Stay calm and professional. Be willing to listen. If the tenant has been long-term and dependable, consider negotiating. Offer a lower rental increase in exchange for a longer lease or other concession. Flexibility now can lead to years of reliable income. Weigh short-term sacrifice against long-term gain.

Raising rents at lease renewal time is expected, but make sure it’s not a shock and be prepared to explain how you arrived at the number you did. By focusing on market value, tenant retention, and added property value, real estate investors can navigate rent increases smoothly and strategically, ensuring long-term success in a competitive rental market.

Need some extra guidance? Please contact us at Wess Cason Realty. We provide real estate and property management services in Charlotte and the surrounding areas in Mecklenburg, Union, and Cabarrus County.