How to Write a Rent Increase Letter: A Step-by-Step Guide

Rent hikes are common for landlords and tenants, but the process can be challenging. A low increase may not generate enough income, while a high increase may result in the loss of a good tenant. The cost of finding a new tenant can be higher than the rent increase, so it’s best to use a rent increase letter to communicate the change in a mutually beneficial way.

Reasons for sending Rent Increase Letter

Landlords increase rent for various reasons, such as rising property expenses like taxes, insurance, and HOA fees, or the need to invest in property upgrades and renovations. Keeping pace with the fair market rent in the area may also prompt a rent hike. Though landlords have the legal right to raise rent, explaining a reasonable cause can make the change more acceptable to tenants.

Prohibited Reasons for Rent Increase

It’s illegal to raise rent as retaliation for a tenant’s actions such as late payments, negative reviews, or claims against the landlord. Similarly, it’s prohibited to increase rent to discriminate against tenants based on their race, religion, or sexuality, or to force them to vacate. Such rent hikes contravene Fair Housing laws and can result in legal action for retaliation or discrimination.

Rent Increase Letter Definition

A rent increase letter is a written notice that informs the tenant of a rent hike and serves as proof that the landlord followed notification laws. Using a standard letter with property letterhead saves time and helps maintain consistency when notifying tenants with expiring leases.

Considerations Before Sending Rent Increase

Consider these points before announcing a rent hike through a letter:

  • State laws on rent hikes: Certain states have restrictions on the amount and methods of rent increases. Check the laws in your state or consult with a lawyer.
  • Timing: Rent hikes are only possible at the end of a lease term. Month-to-month leases can be increased with a 30-day notice, while fixed leases can only be raised at renewal.
  • Market rates: Ensure the increase remains competitive with the local market. Use local rent data rather than advertised prices for accuracy.
  • Standard increase: A standard hike is about 3-5% per year, but it can vary based on factors like population and job growth. Check local rent estimates to price your rental correctly.
  • Security deposit: If the security deposit is based on the monthly rent, be prepared to collect additional funds to cover the deposit increase.

Once you’ve considered these factors, you can proceed to inform the tenant through a friendly rent increase letter.

What to include in Writing a Rent Increase Notice?

A rent increase letter’s text should be concise, courteous, and unambiguous. Your aim is to make it crystal obvious to the renter when the rent will go up, by how much, and what they should do next.

The following should be on a letter giving notice of a rent increase:

  • your name and e-mail address
  • The document’s date
  • a salutation that uses each tenant’s name
  • The address of the property
  • The start date of the initial lease
  • The final day of the initial lease
  • What the current rent i
  • The new rent amount being suggested
  • Date on which the new rent amount becomes effective
  • If the tenant chooses not to renew their lease, the date of notice
  • Adding your name
  • Your signature’s date
  • A place where tenants can sign acknowledging the rent increase
  • When the renter signed the lease (s)

Other considerations for a pleasant rent increase letter include:

  • Be respectful yet professional; you don’t want to come out as emotionless or robotic.
  • Be sincere: It’s acceptable to congratulate and admire your renter, but only if you truly mean it.
  • Be precise: Proofread the letter to ensure that it complies with local legislation and is free of language mistakes.
  • Give an explanation: Describe briefly the need for the rent increase. If required, include local rental costs that are comparable. If explained, most renters will comprehend a modest increase.
  • If the rent increase is the result of building upgrades, be sure to explain how these enhancements will make their lives better.
  • Documentation for the lease renewal: Attaching the lease renewal documentation to the letter is always a good idea. They can swiftly complete the renewal procedure by signing the new lease on the spot and returning both pieces of paper after acknowledging the rent increase in writing.

When to Send a Notice

Depending on the state and kind of lease, different notice periods apply. A month-to-month renter must typically be informed 30 days in advance of a rent increase. The typical requirement for fixed-term tenants is a 30- to 60-day notice period.

Take into account the lease’s notice-to-vacate clause when determining when to send a rent increase letter. For instance, if the lease stipulates that a tenant must give 30 days’ notice before moving out, the rent increase letter should be sent 30 days beforehand. If there is a late notification charge, a tenant who learns of a rent rise after the notice-to-vacate date will be even more irate.

You have three choices for delivering your rent increase notice once you know when to send it:

  • The recommended approach is certified mail, which some jurisdictions demand. You’ll get a delivery receipt if you send it certified mail, which you should maintain on file.
  • Your renter might prefer email, but in this case, you should provide a read receipt so you know they received it.
  • The renter may feel put on the position if you approach them in person, even though you are certain that they have received the letter and are available to address any concerns they may have.
  • Make a copy of the letter requesting a rent increase and save it for your records before mailing it.

What to expect when sending a notice

After receiving notice of a rent increase, a tenant has three choices.

  • The ideal situation is when your renter signs the letter and their updated contract, agreeing to the rent increase.
  • Your tenant could submit a counteroffer if they wish to stay but are unable to pay the increased rent. You must determine whether you are willing to negotiate. The sort of renter they are can be something to take into account. It is preferable to filter known renters than to have a responsible tenant.
  • In the worst instance, your renter may decide against the rent increase and issue you notice to quit. To reduce the period of time the property is empty, you should submit a non-renewal lease notice and advertise the property for rent at this point.
  • It’s OK to send a follow-up email or letter if the renter doesn’t respond to your initial communication within a fair amount of time.


Rent increases might be difficult, but they are vital for your rental business to succeed. Consider the advantages and utilize this as an opportunity to introduce new features, such as online rent payments or rent reporting, rather of viewing it as a potential reason to lose renters.

Request a Property Management Quote