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The countdown has begun! It’s time to prepare rent increase notices for your manufactured housing community residents. While you may not be increasing your rents January 1, you are likely reviewing and increasing them soon thereafter. Though the process can be complicated, it is essential to schedule rent increases properly in order to maximize revenue.
Properly timed and structured rent increases are crucial for maintaining financial stability and ensuring the continued provision of community amenities. ManageAmerica offers comprehensive tools to assist landlords in this critical process. Below we will cover some important factors to consider when preparing your manufactured housing community’s rent increases.
Table of Contents
Why Annual Rent Increases Are Important
Annual rent increases are crucial for maintaining the financial health of your manufactured housing community. They help cover the rising costs of property maintenance, taxes, and other operational expenses. Additionally, regular rent adjustments ensure that your rental rates stay competitive within the market, reflecting the value of the amenities and services provided to residents. By strategically implementing rent increases, you can sustain the quality of your community while maximizing revenue.
Structuring Your Rent Increases
There are a few ways you can structure rent increases, depending on the individual agreements with residents:
Rent increases can occur on the same date for everyone (for example: January 1), providing uniformity and simplicity in administration.
Rent increases can be rolling, dependent on each resident’s lease expiration date, offering flexibility and potentially spreading out the impact on management resources.
Rent increases can vary based on clauses in the lease or the prospectus, allowing for customization based on specific agreements and conditions.
Understanding why annual rent increases are important can help you choose the best structure for your community and ensure you are maximizing revenue while maintaining good relationships with your residents.
Timing Your Rent Increases
When raising rents, it is crucial to follow your local regulations in terms of how much notice you are required to give your residents. Proper timing is essential, not only for compliance, but also for maintaining positive relationships with your residents. For example, if you would like to increase your rents for January 1, and your local regulations require 30-day, 60-day, or 90-day notice, you will want to notify your residents according to the deadlines below:
State Requirement | Notice Deadline |
90-day notice | September 30 |
60-day notice | October 31 |
30-day notice | November 30 |
Understanding how to raise rent as a landlord involves not only knowing the regulations but also communicating effectively with your residents to ensure a smooth transition.
4 factors to consider while Calculating Your Rent Increases
Once you have determined the structure of your rent increases and the required notification deadlines, you will need to calculate the amount of the rent increase. Below are important steps to take and factors to consider as you do so.
1. A Market Survey
Conducting a market survey involves systematically researching rental rates and trends in nearby communities, including manufactured housing communities and site-built housing. This helps you understand how your rental rates compare within the geographic area. A thorough market survey can provide insights into how other communities are handling rent increases and what competitive advantages or disadvantages your community might have.
Key questions to consider include:
Has the overall market increased at all?
Has the city reassessed properties recently?
What are the median rent costs in the area?
Are nearby communities increasing rent, and if so, by how much?
How is your competition structuring and implementing their rent increases?
2. Your Budgeted Expenses
Revisiting your previous budgets is crucial in determining appropriate rent increases. Your budgeted expenses directly impact the financial health of your community and justify the need for rent adjustments. Consider the following:
What have you budgeted this past year for property taxes, maintenance, and operating costs?
Are you staying within your budget consistently, or are expenses increasing?
Have you made capital improvements on the property beyond general upkeep and maintenance?
How do these expenses align with your current rental income, and do they necessitate a rent increase to maintain financial stability?
Knowing how to raise rent as a landlord effectively involves balancing these budgetary needs with fair rent adjustments for residents.
3. The Current Economic Climate
Considering the current economic climate is essential for making informed decisions about rent increases. Unlike market surveys, which focus on competitive positioning, this involves assessing broader economic factors and their impact on your residents.
Important aspects to consider include:
What does the job market look like around your properties?
Is the economy as a whole booming or heading for a downturn?
Are you seeing any consistent signs of financial strain among your residents, such as increased late payments or requests for assistance?
How is the local economic environment affecting your community specifically?
Review the history of rent increases. How recent was the last increase, and by how much?
Are any of the properties you manage rent-controlled? If so, your local government will have precise guidelines for any increase in rents.
You also want to consider your resident base. Who is your property’s target market, and how does that align with your potential rent increase?
4. Benefits & Amenities of Manufactured Home Communities
When preparing rent increases, it is important to highlight the numerous benefits and amenities that residents enjoy while living in a manufactured home community. These factors can help justify rent increases by demonstrating the value provided.
Key benefits may include:
Professional management to care for the maintenance and operations of the properties
Community guidelines for creating a great neighborhood
Potentially lower monthly costs compared to other housing options
Resident screening (depending on your state’s regulations)
Location and proximity to local attractions
Community events that foster a sense of belonging and community spirit
Highlighting these amenities underscores why annual rent increases are important for maintaining and enhancing the quality of living for your residents.
Effective Rent Increase Strategies with ManageAmerica
Once you have determined how to proceed with rent increases, ManageAmerica has an easy way to structure even the most complicated rent increase scheduling. Our Lease Management System tracks and notifies you of sites with pending rent increases, enables you to calculate and schedule any type of rent increase, and even generates the necessary rent increase documents.
At ManageAmerica, we're not just a software provider but also a strategic partner that's uniquely equipped to help you streamline and grow your business. Throughout this process, our tools and features can assist you in every step, from market surveys to budget analysis, ensuring you never miss a rent increase. Contact us for a demonstration - never miss a rent increase!
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