Renting out your Austin property can be a lucrative investment. But in order to maintain your yields, you’ll probably need to raise rent every once in a while.
That’s why landlords need to be aware of the local rent increase laws in their state or city. In this article, we’ll explore the sometimes-complicated but all-important world of rent increase laws in Austin, Texas.
Let’s dive in!
How Much Can You Increase Rent?
While there is no specific limit set on rent increases in Austin, and across Texas, several factors should be considered before making any significant changes to the rent amount.
Market conditions play a crucial role in determining how much you can increase the rent. If the demand for rental properties is high and the supply is low, you may have more flexibility in raising the rent. Conversely, if the market is saturated with available rentals, you may need to be more cautious in increasing the rent to avoid driving away potential residents.
For assisted housing, according to the Housing Authority City of Austin (HACA), all rent increase requests are subject to a rent reasonableness analysis. Be sure to adhere to your responsibilities as a landlord in Austin for assisted housing.
The type and quality of the property also influence the rent increase. If you have made significant improvements to the property, such as renovating the kitchen or adding new amenities, you may be justified in raising the rent to reflect the increased value. Similarly, if your property is located in a desirable neighborhood with excellent schools and convenient amenities, you may be able to request higher rent prices.
It’s important to strike a balance when raising the rent. Charging too much can lead to resident dissatisfaction and even vacancies. Charging too little may not maximize your rental income. It is advisable to research the local rental market and compare the rent prices of similar properties in your area to make an informed decision and ensure your rent increase is fair and reasonable.
Additionally, it’s essential to provide your residents with a clear explanation for the increase and give them sufficient notice. Open and transparent communication can allow your residents to discuss any concerns or negotiate the terms of the rent increase.
Furthermore, it is worth considering offering incentives or additional services along with the rent increase. For example, you could offer upgraded appliances, access to a fitness center, or covered parking to justify the higher rent.
When Can You Increase Rent?
According to the Texas Property Code, if your lease agreement specifies a term, such as a one-year lease, you can only increase the rent at the end of that term.
If your lease agreement is on a month-to-month basis, you must provide your resident with written notice of the rent increase at least 30 days before it takes effect. It is crucial to serve this notice properly, either by hand delivery or by certified mail, in order to ensure there is a record of the communication.
Note: An Austin property management company can help when it comes to setting rent rates, collecting rent, lease negotiations, and more.
How Do You Increase Rent?
Increasing rent in Austin, Texas, involves several steps to ensure compliance with the law and to maintain a positive landlord-resident relationship.
First, review your lease agreement to determine the terms regarding rent increases. If there are specific provisions outlining the process, follow them accordingly.
If your lease agreement does not include provisions on rent increases, you must provide written notice to your resident stating the amount of the increase and the effective date. As mentioned earlier, the notice must be served at least 30 days before the new rent amount takes effect. Remember to keep a copy of the notice for your records.
If you have a good relationship with your resident, consider discussing the proposed rent increase and explain your reasons for doing so.
Giving Notice of Rent Increase
Giving notice of a rent increase is a crucial step in the process. The notice should be provided in writing and include the new rent amount, the effective date, and any other relevant information such as payment methods or changes to lease terms. It is essential to serve this notice within the required timeframe and keep a record of the communication.
When serving the notice, you have the option to deliver it in person or send it via certified mail. If you choose to hand deliver the notice, it is recommended to keep a witness present to ensure there is an additional record of the communication. If you decide to send the notice by certified mail, request a return receipt to confirm that it was received by your resident.
Final Thoughts: Rent Increase Laws in Austin, Texas
Remember to consider market conditions, lease agreements, and the impact on your residents when determining the amount and timing of rent increases. Clear and timely communication, along with proper documentation, can help ensure a smooth transition and go a long way in maintaining a positive landlord-resident relationship.
As a responsible landlord, it is essential to stay informed about rent increase regulations and any updates or changes that may occur. By staying proactive and knowledgeable, you can navigate through the rental market in Austin, Texas, with confidence and success.
Looking for a professional property management company to help with setting and raising rents? Contact our team today!
