How to Write a Rent Increase Letter [Free Template]

rent increase letter

As a landlord or property owner, one of the most critical conversations you’ll have with your tenant is about raising rent. The rent increase letter helps initiate this talk, but there are some essential guidelines and practices to understand before taking this step.

In this blog, we’ll guide you on how often and how much you can increase the rent, what to consider beforehand, and what to include in the letter to raise the rent, ending with a FREE rent increase template for your use.

Pro Tip

Increasing rents can be stressful and scary so I wanted to share some tips based on my experience. Rent increases are very common and when a unit is managed by a professional property manager, they increase rents annually. If you are a smaller landlord that is considering raising the rates for the first time, don’t hesitate. Get rental comparables and figure how if you are charging rents above, at or below market (based on the size, beds/baths and condition of your rental property. We’ve built a free tool that helps you figure out “How much should I charge for rent? Based on this information, feel comfortable and confident raising the rents. Good luck!

How Often Can a Landlord Increase the Rent?

In the U.S., you can set your own rents without any cap, and in most states with a typical 30-day notice, you can raise them anytime.

Generally, you can increase the monthly rent when a lease agreement ends or at the end of a month lease term. However, there are exceptions.

If your property is in an area with rent stabilization or control laws, there may be restrictions on rental increase notice. Most states prevent unfair rent hikes, like rent increase notices due to tenant complaints.

While Oregon and California have implemented statewide rent control laws, other areas, like the District of Columbia and specific cities in New York, New Jersey, Maine, Maryland, and Minnesota, have local regulations in place.

Before proceeding with a rental increase letter, it’s advisable to consult with a real estate attorney.

Factors to Consider Before Increasing the Rent

Raising the rent involves careful consideration of various factors.

  • Rent Competition: Understand the rental market conditions in your area. This will help set a fair market rent increase.
  • How Much rent to charge: Use online websites like or to check existing rental property listings that are similar to your rental (aka Rental comps).
  • Use Baselane’s free Price My Rental tool to figure out how much rent to charge.
  • Lease Term: Typically, you can raise the rent at the end of a lease period or the original lease terms.
  • Notice Period: Depending on local laws and notice periods, you may need to give your tenant a notice 30 to 90 days in advance before a rental increase.
  • Security Deposit: If you’re raising the rent, consider if the security deposit will increase equivalently.

How Much Can You Increase Rent?

Different states have specific rental hike rules. For instance, in New York, while there’s no cap on rent prices, you must alert tenants using a sample rent increase letter if you raise rent by 5% or more.

A 3-5% annual increase in rent aligns with market trends and added expenses, balancing profitability with rent payments and tenant retention. However, for valued, long-term tenants, smaller increments (1-1.15%) might be advisable to maintain a positive relationship and avoid turnover costs.

Case Study: Mrs. Robinson's Rent Increase Approach

One of my friends, Mrs. Robinson, owns a cozy two-bedroom apartment downtown. A while back, she faced rising costs but didn’t want to lose her tenant, Sarah, who had been there for three years.

Before raising the rent, Mrs. Robinson checked the rents of similar apartments nearby. She found most were charging 10% more than she did. So, she opted for a modest 5% increase, keeping it below the local average.

She wrote a straightforward letter to Sarah about the change. Sarah, understanding the situation and grateful for the fair deal, happily renewed the lease.

Key Takeaways:

  • Check local rents before making a decision.
  • Being upfront and fair can maintain a good tenant relationship.

Things to Include in a Rent Increase Letter to Tenants

Include these key details when writing a rent increase letter:

  • Date and tenant’s details (name etc).
  • Rental property address.
  • Current rent amount and proposed increase in rent.
  • Effective date of the rental rates increase.
  • Deadlines for acceptance or non-renewal lease notice.
  • Any changes to the security deposit.

Rent Increase Letter

Date: March 15, 2023

To: James McAllister

Address: 123 Elm Street, Springfield, IL, 62701

Dear James,

I am writing to inform you of a necessary adjustment to the rent for 123 Elm Street. Effective May 1, 2023, the monthly rent will increase from $1,000 to $1,050. Concurrently, the security deposit will be updated to match the new rent amount, totaling $1,050.

I kindly request your confirmation of these terms by April 1, 2023. If you find the new terms unsatisfactory, please note that the agreed move-out date would be April 30, 2023.

If you have any questions or require further clarification, please reach out to my email address or contact me by March 25, 2023.


Johnathon Doe

(555) 123-4567

How to Deliver the Rent Increase Notice

Ensuring timely and verifiable delivery of the notice of rent increase to your tenant is crucial, with the following recommended methods (some states require physical letter):

  • Certified Mail: This traditional method provides a tangible record of delivery. You’ll receive a receipt confirming that your tenant has the notice in hand.
  • Email: A faster method suitable for tech-savvy tenants. It’s efficient, but requesting a read receipt or a confirmation reply is essential to ensure the tenant has seen and understood the content.
  • In-Person: Handing the rental increase notice directly can be the most personal approach. It facilitates immediate dialogue, allowing any immediate concerns or questions to be addressed. But you have to be ready for spontaneous discussions or reactions.

Final Thoughts

Raising rent requires a balance of legal knowledge, market understanding, and effective communication. It’s not just about profit but fostering a healthy tenant-landlord relationship. It’s essential to ensure that any increase in rent is in line with market rates and communicated clearly through a well-structured rent increase letter.

After setting the new rent, simplify the payment process for you and your tenant with Baselane’s online rent collection platform. Baselane simplifies property management and ensures timely payments from tenants.

To experience the ease it brings, book a FREE DEMO with Baselane today.

In this article:
Baselane Banking is now offering 4.19% APY interest

Automated and free Rent Collection, without the stress

Avatar photo
Financial Technology, Real Estate Investing, and Property Management, Accounting and Tax, Finance
Saad started his career as a Certified Public Accountant (CPA) working for a top-tier accounting firm. He was responsible for helping audit alternative investment funds. He later worked at a hedge fund where he was responsible for preparing financial statements and implementing new technology. He also ran a successful private tax practice for five years.

After completing his MBA at Duke, Saad joined The Boston Consulting Group to do management consulting. At BCG his experience spanned several industries and growth projects across Pharma, Retail, and Technology companies. His passion for democratizing finances led him to Plaid, a fintech, where he worked with large Banks and Financial Institutions to make finances and money easier for all.
rent increase letter
How to Write a Rent Increase Letter [Free Template]