Renters Beware: Rent Hikes Coming Soon

If you are a renter you should be aware that rent hikes are on the way, and they will likely be large enough to make a dent in your monthly expenses.

Over the last decade average rental rates have increased about 1% a year, and as high as 5% depending on the area. Some areas like Austin and Boston saw rental increases in the last year of 17-30%. The housing crisis has made the demand for rental properties higher, and with vacancy rates dropping landlords are cashing in on the opportunity. Many renters will have not choice but to either pay more or move to a less expensive area.

Rent increases are not arbitrary. Landlords must follow rules when instituting an increase. It is important to understand your state laws to ensure that you are provided with sufficient notice and that the rent increase is fair. For example, in California a landlord must provide tenants 30 days notice in writing if the increase is 10% or less. Such notice must be provided at any time during the 12 month period during which the increase is to take effect.

If the increase is to be greater than 10% notice must be given at least 60 days in advance. There are formulas to calculate percentages of rent increase. No matter the increase amount, landlords must either deliver the written notice to you personally, or mail it. If it is mailed an extra five days are tagged on to the notice period to ensure proper delivery (35 or 65 days, depending on the increase, from the date of mailing).

Rent increases also depend on whether you have a month-to-month tenancy or a tenancy for a specific period, such as a year. Make sure to understand how your state laws apply to you. The rising number of rent increases should last for some time, but will eventually get better as the market stabilizes.