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How much should you raise the rent? A step-by-step method

DoorKeeping team

3 min read

Start from the market, not the calendar: find what similar units nearby ask today, subtract the cost of losing a good tenant (a vacant month plus turnover work), check whether your state or city caps increases, and pick a figure at or below the gap between current rent and market. A modest increase for a tenant who pays on time is often worth more than the top of the range.

What steps decide the number?

  1. Find the rents of three to five similar units (same bedrooms, condition and area) that are listed now. Asking rents are a starting point and signed rents are better.
  2. Look at government data for context. HUD publishes Fair Market Rents by area each year (gross rent estimates for standard-quality units, mainly used to set voucher payment standards), and the Bureau of Labor Statistics publishes a rent of primary residence index within the Consumer Price Index. They show direction, not your unit's price.
  3. Check legal limits. Some states and cities cap annual increases, and almost all require written notice of a set length. See notice requirements.
  4. Work out what losing the tenant would cost (below).
  5. Choose the increase, write the notice and send it on time.

What does turnover cost compared with a bigger increase?

Every move-out costs a vacant period, cleaning and paint, advertising, and your time. Add those up for your own unit. If one turnover would cost more than a year of the extra rent you could ask, a smaller increase that keeps the tenant is the better trade.

Example a made-up unit rents for $1,200 and the market is $1,300. A $100 increase brings $1,200 more a year. If a vacancy would cost one month of rent ($1,200) plus $600 for paint and cleaning, losing the tenant costs $1,800, which is 18 months of the $100 gap. If the increase makes the tenant leave, you lose; if you raise by $50 ($600 a year) and they stay, you keep the unit filled and close the gap next year.

This is arithmetic with invented numbers. Use your own figures.

What about the tenant in front of you?

  • Pays on time, takes care of the unit, rarely calls: lean toward the lower end of the range.
  • Pays late every month: a larger increase is reasonable, and so is a talk about the late pattern. See tenants who pay late every month.
  • Long-time tenant far below market: step up over two renewals instead of one jump.
  • Voucher tenants have their own process, because the housing authority sets what it will pay. See raising rent for a voucher tenant.

Apply the same method to every tenant. Setting rent increases differently for people in a protected class is a fair housing problem, not a pricing choice (42 U.S.C. 3604).

How do I present it?

Send the notice with a short note: the new amount, the date it starts, the reason in a sentence (taxes, insurance and repairs have all gone up, and rents nearby have moved), and an offer to talk. Give more than the legal minimum notice when you can, since a tenant who has time to plan is less likely to leave.

How DoorKeeping handles it

DoorKeeping holds your rent roll, each lease's end date and the rent on every unit, so you can ask Claude or ChatGPT which leases end in the next 90 days and how far each rent sits below the others of the same size. You decide the new rent and approve the renewal offer before it goes out. Rent and payments stay in your own bank accounts. DoorKeeping never holds your money and sends a payment only when you approve it.

Sources

  1. HUD User: Fair Market Rents, read Oct 30, 2026
  2. U.S. Bureau of Labor Statistics: Owners equivalent rent and rent (CPI), read Oct 30, 2026
  3. Fair Housing Act, 42 U.S.C. 3604 (Cornell Legal Information Institute), read Oct 30, 2026
  4. DoorKeeping: Connect Claude or ChatGPT (steps and tools list), read Oct 30, 2026

Questions

Is there a standard percentage landlords raise rent?
No national standard exists. Some places cap it by law, and elsewhere it is a market decision. Use local comparable rents and your own turnover cost.
Can I raise rent in the middle of a lease?
Usually not, unless the lease allows it. Increases normally take effect at renewal or, on a month-to-month tenancy, after proper notice.
How often should I raise rent?
Once a year at renewal is common. Review the market before each renewal and skip a year if the tenant is excellent and the gap is small.
Should I raise rent for a tenant who is behind?
Deal with the arrears first through your normal process. A rent increase does not fix a payment problem and can make it worse.

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