What Is a Standard Rent Increase?


You are not alone if you are looking for the apartment of your dreams and wondering, “What is a normal rent increase per year?” After all, you don’t want to fall in love with an apartment only to find out that you suddenly can’t afford to pay the rent. Learning what is – and what isn’t – the norm when it comes to rent increases can help you decide whether you want to accept the increase, or whether you’re trying to negotiate or just move on.

Is there a standard rent increase percentage?

It’s understandable that you want to know the percentage of annual rent increase for your accommodation so that you can prepare in advance. However, in many places you won’t find a general law or limit on how much a landlord can increase your rent. While rent-stabilized apartments must follow certain rules (so make sure you know if you live in rent-stabilized accommodation!), Non-stabilized apartments are generally not subject to rent increase protections.

That said, it is relatively rare for a landlord to try to increase the rent by more than 5% in a year (barring exceptional circumstances). A typical percentage rent increase is usually around 3%.

What factors influence the increase in rent per year?

Understanding the factors that affect a standard rent increase can help you make sure that you know if your rent increase is, well, standard. Just as rental rates vary from building to building, so do rent increases. While your landlord or property manager doesn’t have to tell you why they are raising your rent, you are within your rights if you want to check with management to find out exactly what caused the price hike.

Typical reasons for a landlord to increase your rent are:

  • Change in market factors (such as changes in interest rates)
  • Costs of necessary repairs
  • General inflation
  • Higher cost of living
  • Higher property taxes
  • Increase in property value, thanks to recent upgrades to buildings or units

Some landlords will tell you in writing where the rate of rent increase is coming from. However, owners do not have to share this information, so you may need to request to get it. Knowing the reasons your rent went up will help you check if the new rent rate makes sense.

You can also research the average rental prices for your building and nearby buildings with comparable units. This information will help you confirm whether the rent increase is standard and appropriate, or if you have a reason to try to combat the increase.

When would a standard rent increase take place?

Individual states set the rules for standard rent increases, although you’ll find a fairly consistent set of rules to keep in mind. If you have a written and signed lease, you cannot receive a rent increase completely out of the blue. Your landlord or property manager should explain their standard rent increase policy (including how often a rent increase can occur) at the start of the lease you’re signing. Check this information when signing your name to find out what to expect.

Typically, a landlord must wait until the end of a standard rental agreement to increase the rent. When your rental agreement ends, your landlord will usually need to provide a rent increase notice 30 to 60 days in advance so that you know what you are getting into when you sign your new lease. However, if you’ve signed a standard lease that says your landlord can increase the rent at a time other than the end of your lease, you may be violating these rules.

Also, if you have a monthly lease, the rules are a bit different. Your landlord can increase your rent at any time, as long as you give you 30 days notice.

Keep in mind that a landlord can’t raise the rent because they think you’re picky and want to fight back. Nor can a landlord increase the rent in a discriminatory manner.

How will you find out about a rent increase?

Any rent increase must be received in writing. A standard rent increase notice letter will include the following information:

  • Date of notice
  • Address of affected property
  • Name (s) of tenant (s)
  • Owner’s name and contact details
  • Current cost of rent
  • Amount that the rent will increase
  • New rent amount due each month
  • Date of rent increase

Your landlord can follow up via email to make sure you’ve received the notice, but they should send the official rent increase letter by certified mail or hand deliver it to make sure you receive it. Some owners go even further and include a response form where you check a box next to the statement indicating whether you agree to the increase and then sign the notice.

What should you do if you receive a rent increase?

If you receive a rent increase notice, you will need to decide whether you want to stay in your apartment and pay the higher price or look for alternative solutions. If you feel the increase is reasonable and want to stay, just follow the instructions you receive in your letter. Some owners will ask you to respond directly to the letter and some will not, but the letter you receive should clarify this next step.

If you are in doubt about the rent increase, give yourself a reasonable time to consider the pros and cons of accepting or rejecting the rent increase. Again, you have every right to ask for a justification for the increase or even to negotiate. Just make sure you take whatever action you take after receiving a rent increase notice in a professional manner.

Landlords have to do a lot of work to fill an empty unit, so in most cases they’d rather charge a reasonable increase than risk losing you as a tenant due to extravagant demand. Although there is no single answer to the question, “How much is the rent increasing per year?” Understanding what makes a reasonable and standard rent increase can help you determine the appropriate next steps you can take.

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