I’m closing on a park soon and plan to raise rents immediately. There are some expired lot leases I want to put under a 12- month lease with a higher rent rate. I’m thinking about how to present this higher rent to the tenants. ($50 higher) how should I word it? Anyone have a good sample that they use? Any suggestions on how I can raise the rent without them leaving? They are lot renters only.
I would be keeping all tenants on M2M leases to allow you greater control over your business interests. When taking over a new property it may be necessary to evict some tenants. M2M makes it easier by simply not renewing. It is not necessary to sign new leases as M2M is automatic in most jurisdictions. Term leases do not prevent tenants from leaving when ever they choose all it does is takes control away from the landlord.
As far as a letter is concerned keep it simple by stating that as of such and such date (based on your state landlord tennat regulations) rent will be raised to the new level. No need for reasons or excuses, simple is best. There may be some push back but you simply ignore it, business is business. There is nothing you can do to prevent tenants from leaving but it is highly unlikely it will happen. Rent increases are very rarely the reason for tenants to leave. If they own the home they rarely can afford the cost of a move over a reasonable rent increases. $50 should not be a issue.
Alternately if a tenant does leave over a rent increase consider yourself lucky, they obviously were at a financial tipping point and would likely be a very low quality tenant that you would be constantly chasing for rent.
This is awesome! Thanks, Greg!
First, I agree with Greg: Keep it simple and direct. Don’t waffle; don’t apologize. Keep it well under one page if possible. If there’s some sort of legal boilerplate you must include, consider whether it can go on the reverse side of the letter.
Second, I heard Frank Rolfe on the Bigger Pockets Podcast. He mentioned that each state has a Mobile Home Park owner’s association, and that you can contact them about the laws in your state. That could be a worthwhile call to make sure your plan is within the legal guidelines. (For instance if your state requires you to give 60 days notice, you won’t want to send a letter that gives 15 days notice.)
Third, if you plan anything at all that could be considered an upgrade, mention that very briefly — a sentence or two. You’re going to re-stripe the guest parking spaces; your neighbor Joe Smith will be the new Park manager; even something minor could go into this part of the letter.
Congratulations on your new Park, and good luck!
Date: May 1st 2018
NOTICE OF INCREASE IN RENT
To:__________ __ and all other residents who reside in space number XXX___ , at xxx Your Road, your Town, CA 91917
This is a 90 (Ninety) day notice of rent increase. Your current base rent is $ .00.
Effective August 1st 2018 your base rent will increase by 0.00 to 0.00.
Check with your local codes to see what time frame you must give them. Some states it’s 90 days. Also I used this document in word and do a mail merge from the excel spreadsheet that has fields such as:
You can also add fields such as move in date, anniversary date etc. and incorporate that into your notice.
One thing I have recently put on these notices is Move in Date. I put a nice not on it that says " Thank you for being a valued Homeowner since XX/XXX" Really it’s just for my tracking but I figured a little thank you note is nice.
AnthonyGeneric Rent Increase Notice.pdf (259.0 KB)
A good advisor or knowledgable broker would have suggested getting the seller to raise the rents legally if possible before closing. Get it written into the contract. Later you can always defer to the seller having raised rents intentionally, suggesting “some owners have been known to raise rents to justify a higher price”.