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If you’re a landlord, you may ask yourself if it’s time to raise rent again. With recent inflation, it’s no surprise that many landlords throughout the country have raised their rent. The truth is, while rent has gone up nearly 20% in the past couple of years, so has everything else. Electricity, gas, water, and food prices have also significantly increased. With that being said, address the current state of the market and what current landlords should be aware of in 2023.
We know you’ve already heard enough about inflation and potentially scarce times ahead. Therefore, it’s pivotal to know how much you can increase rent each year to meet growing costs to ensure you are not losing money on your investment properties! But the real question is, how much can you raise rent prices in California?
We understand that increasing rent on your long-term rentals may be a bit painful, especially if you’ve had long-term tenants enjoying lower prices for the past several years. However, as previously mentioned, rent isn’t the only thing increasing. To keep up with rising costs, landlords must re-evaluate their rental property spending to income ratio.
According to AB 1482, you can raise rent prices by 5% plus the percentage in the consumer price index every 12 months. This means landlords are authorized to increase rent by no more than 10% annually. It’s important to note that AB 1482 excludes commercial properties, hotels, schools, mobile homes, and any building built in the last 15 years.
With that being said, before increasing rent, it’s wise to:
The experience level in managing rentals cannot compare to someone outside the industry. Free up your time, and increase the return on your investment by hiring a trusted property manager! They will help you make tough decisions like rent increases and support you no matter what the housing market presents in 2023. Enjoy full transparency regarding rent, expenses, maintenance, and more when working with a property manager.
A property manager will help you:
Let us do the heavy lifting for you! Being a landlord should not be stressful, and feeling like you have nobody to turn to can be overwhelming. We’re committed to complete transparency and full support to combat your fears. Are you ready to take advantage of the housing market? Do so with the help of our incredible property management team. The team at Ferguson PM is 100% committed to providing reliable, personal property management services. Learn what sets us apart by giving us a call!