Not quite sure how much rent you can ask for your Colorado property? You’re not alone. Many landlords struggle when determining what to charge for rent on their Colorado rental apartments, townhomes, and houses. Whether partnering with Northern Colorado property managers or navigating through the tenant process on your own, it’s essential to understand the current market value of your rental to ensure you’re getting what the property is worth in today’s real estate climate.
Of course, establishing a baseline monthly rental rate is only the first step in long-term tenant success. Most landlords will, at some point, find themselves considering raising their monthly rents at the end of an existing lease. There are many reasons why a landlord may want to raise the rent on a unit, including:
Cost of Living Increase
It’s no secret that the cost of living in Northern Colorado (and pretty much everywhere else) increases on an almost annual basis. As a result, many landlords must increase their monthly rent with both new tenants and lease renewals. Your property management team can work with you to build the annual percentage bump directly into your lease agreement, so your tenants know exactly what to expect. Additionally, a qualified property management team will also ensure that you’ve met every legal rent requirement to mitigate your overall risk as a property owner.
Sometimes an apartment or rental home requires extensive repair or maintenance to ensure the property is both a comfortable and safe environment for anyone living in the unit. These types of repairs can happen at any time but are very common in older properties due to normal wear and tear. The cost of updating electrical systems, installing a new HVAC unit, or other maintenance necessities can quickly add up. This increase in costs is often directly passed down to the tenants to help absorb the expenditure.
Other Rental Unit Improvements
Maintenance needs aren’t the only updates that a landlord may make to a rental unit at any given time. Sometimes, sizable changes are made to a home or apartment to improve the overall function, aesthetics, and enjoyment of the property. Updating the kitchen with nicer furnishings and appliances, installing a central air system, and even adding a security system are just some of the many ways that a landlord may improve creature comforts for tenants as well as boost the overall value of the building or land. The increase in property value can make a building more highly sought after and directly impact monthly rent.
It’s often been said that “nothing is certain but death and taxes.” However, a more accurate saying would be, “nothing is certain but death and increased taxes.” All landlords recognize that, eventually, their tax rate will inevitably rise. At some point, if your increased taxes impacts both the building and your land, you may want to consider increasing your monthly rental rate.
When it comes to real estate, price often boils down to location, location, location. The same can be said for rental properties. The overall climate of a particular neighborhood can play a pivotal role in how desirable a property is, as well as the final set monthly rent. Best of all, the real estate market can change quickly, making a formerly undesirable district a highly sought after zip code in just a few short years. As a landlord, finding yourself the proud owner of a rental unit in an up-and-coming neighborhood is a perfect opportunity to reassess how much you can feasibly charge tenants.
Of course, as a landlord, your rental property is your investment; you have the right to increase your monthly rates at the end of any contract, for almost any reason. The most important step when raising your rent to tenants is to consult with qualified professionals who are equipped to help you navigate through the process quickly and compliantly. A skilled and experienced North Colorado property management team will partner with you to protect your best interests throughout the process and mitigate your overall tenant risk.
All Property Services offers a full suite of property management services on apartments, townhomes, and houses throughout Northern Colorado. Contact our team of property management specialists today to learn more.