A standard rent increase is a common rental term you’re likely to encounter in your rental process. You’re not alone if you’re looking for your dream apartment and find yourself 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 you suddenly can’t afford to pay the rent when the lease renewal is delivered. Learning what is — and isn’t — standard when it comes to rent increases can help you decide if you want to accept the increase, try to negotiate, or just move on.
Why do landlords increase rent?
Typical reasons for a landlord to increase your rent include:
- Changing market factors (like changing interest rates)
- Costs of necessary repairs
- General inflation
- Higher cost of living
- Higher property taxes
- Increased property value, thanks to recent building or unit upgrades
There are several reasons why landlords might increase rent. The most common reason is to keep up with the rising cost of living expenses, such as property taxes, insurance, and maintenance costs. Additionally, landlords may increase rent to maintain a competitive market rate or to cover the costs of renovations or repairs. Rent is on the rise nationally, with a growing demand for apartments. To keep up with the inventory, rent prices will rise. This creates a competitive rental market and you may likely experience a rent increase if you live in a major, highly populated city.
How often can a landlord increase rent?
The frequency of rent increases varies depending on state and local laws.
Individual states set the rules regarding standard rent increases, though you’ll find a fairly uniform set of rules to keep in mind. If you have a written, signed lease, you can’t receive a rent increase completely out of the blue. Your landlord or property manager must explain their standard rent increase policy (including how often a rent increase can occur) upfront in the lease you’re signing. Double-check that information when you sign your name to know what you can expect going forward.
Typically, a landlord must wait until the end of a standard lease agreement to increase the rent. When your lease agreement is ending, your landlord will usually have to supply a rent increase notice 30 to 60 days in advance so you know what you’re getting into when you sign your new lease. However, if you’ve signed a standard lease that states your landlord can increase rent at a time other than when your lease is up, you may be stuck with those rules.
Additionally, if you have a month-to-month lease, the rules are a bit different. Your landlord can increase your rent whenever they want as long as they give you 30 days’ notice.
Keep in mind that a landlord cannot increase rent because they think you’re difficult and they want to retaliate. A landlord also can’t raise rent in a discriminatory fashion.
Is there a standard rent increase percentage?
It’s understandable that you’d want to know the annual rent increase percentage for your unit so you can prepare ahead of time. However, in many places, you won’t find a blanket law setting or limiting the amount a landlord can increase your rent. While rent-stabilized apartments must follow certain rules (so make sure you know if you live in a rent-stabilized unit!), non-stabilized apartments aren’t typically subject to rent increase protections.
That said, it’s relatively rare for a landlord to try to increase rent by more than 5% in a year (unless there are exceptional circumstances). A typical rent increase percentage is usually around 3%.
How will you find out about a rent increase?
Any rent increase must come to you in writing. A standard rent increase notice letter will include the following information:
- Date of the notice
- Address of the affected property
- Renter(s) name(s)
- Landlord’s name and contact information
- Current rent cost
- Amount the rent will increase
- New rent amount owed every month
- Date the rent will increase
Your landlord may follow up via email to make sure you got the notice, but they must send the official rent increase letter via certified mail or deliver it by hand to ensure you receive it. Some landlords even go a step further and include a reply form where you check a box next to the statement indicating whether you agree to the increase, then sign the notice.
What should you do if you receive a rent increase?
If you do receive a rent increase notice, you’ll have to decide whether you want to stay in your unit and pay the higher price or look for alternative solutions. If you determine the increase is reasonable and you want to stay, just follow the instructions you receive in your letter. Some landlords will require you to respond directly to the letter and others won’t, but the letter you receive should make that next step clear.
If you have any kind of doubt about the increase, give yourself a reasonable period of time to consider the pros and cons of accepting or rejecting the rent increase. Again, you’re well within your rights to ask for a rationale for the increase or even to negotiate. Just make sure you proceed with any actions you take after receiving a rent increase notice in a professional manner.
How to negotiate a rent increase
If you receive a rent increase notice, there are several strategies you can use to negotiate with your landlord.
- Researce comparable rental rates in the area
Get a clear understanding of other rates in the area for similar sized apartments with similar amenities. Bring these as examples to show your landlord if you feel your rent increase is not comparable to other rent prices in the area.
- Discuss the landlord’s reasons for the increase
Understanding the reason for the rent increase will give you a better idea of what you are able to negotiate. If it’s because other rentals are going up in the area, you may not have as much negotiating power, but if there’s not clear explanation for the increase you could have an opportunity to talk them down.
- Propose a reasonable compromise
Speak to your value as a renter and what you bring to the table. It takes more time to list an apartment and find a new renter, which can cause the landlord to lose valuable income. Propose a compromise that makes sense to both parties and then go from there.
Frequently asked questions
In most cases, landlords cannot increase rent in the middle of a lease unless the lease agreement allows for it. Check your lease agreement to make sure you are aware of the specifics mention regarding rent increases.
Most states require landlords to give tenants at least 30 days notice before increasing rent.
Landlords must comply with state and local laws when increasing rent. Some states have limits on how much landlords can increase rent, and landlords cannot increase rent in a discriminatory or retaliatory manner.
New York, New Jersey, California, Oregon, and Washington D.C all have laws on how much rent can be increased. It’s important to note that certain cities and towns have their own governing laws regarding rent increases. Research your local laws to learn more about your protections as a renter.
Final thoughts
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 renter due to an outlandish request. While there’s no one answer to the question, “How much does rent increase per year?” understanding what makes a reasonable and standard rent increase can help you figure out the appropriate next steps you can take.
Related content
