How to Raise Rent Without Losing Your Tenant

How to Raise Rent Without Losing Your Tenant

By Jorge Vazquez

Let me walk you through a situation that every landlord eventually faces—raising the rent. Now, I’ve done over 3,500 real estate transactions, but trust me, every rent increase has its own story.

This one’s about a tenant who had been with us for over three years in a quiet, reliable B-class rental. Great payment history. No complaints. No late-night maintenance drama. But like every property owner right now, I was staring down a tax bill that looked like it was written by someone who hates landlords for sport.

What Changed:

• Property taxes jumped nearly 18% year-over-year

• Insurance premium doubled—from $1,800 to $3,600

• Basic repair costs? Forget about it. Everything’s up

So I knew I had to raise the rent, but I didn’t want to just send a boring form letter. I treat this business like it’s relationship-based. We’re not running a vending machine—we’re housing people.

Step 1: Do the Homework

Before I even opened my mouth, I pulled comps. Same area, similar layout, condition, square footage—you know the drill. But here’s where I didn’t follow the herd:

Even if some comps were cheaper, I didn’t give up on the increase.

Here’s why: A lot of new investors panic when they see cheaper rentals nearby. They fold too fast. But comps don’t always tell the full story. Sometimes new listings are just priced low to fill vacancies fast—especially if they’re recent flips or owned by landlords desperate to avoid holding costs. Think of it like a car lot: just because the car across the street has a “sale” tag doesn’t mean it’s the better ride.

If you know your unit brings real value, don’t back off. Think outside the box. Your rental might have better maintenance, a more responsive landlord (hey, that’s you), or upgrades that don’t show up in an MLS blurb. If your costs are rising and the property justifies it, hold your ground—with proof.

Even better? Provide receipts. I literally showed my tenant copies of my actual tax bill and insurance renewal from the last two years. It wasn’t just, “Hey, prices are up.” It was: “Here’s my reality. Let me show you what I’m dealing with.”

Step 2: Draft the Message

Here’s what I actually sent:

“Hey [Tenant Name],

Hope you’re doing great. I wanted to reach out personally before you receive any formal notice about the rent. First off, I want to say thank you—you’ve been an amazing tenant, always on time and respectful of the home.

That said, I wanted to be transparent about what’s going on. Over the last year, property taxes and insurance have both gone up significantly—on this property alone, it’s added several thousand to my annual costs.

Based on market rents in the area and these rising costs, we’re going to need to increase the rent starting with your next lease term. I’ll send the official notice soon, but wanted to talk it through first and see how you’re doing. Open to a quick call?”

Step 3: The Response

The tenant replied within 30 minutes:

“Hey Jorge, appreciate the heads-up. I’ve seen prices going up everywhere so I figured this was coming. Can you let me know how much it’s going up so I can plan ahead?”

That’s when I knew this wasn’t going to be a war—it was going to be a conversation.

I told them it would go up $100—a few bucks over market, but still fair given the current costs. And I offered:

• A 2-year lease with no further increases

• Flexible options with the deposit—like using it for the last month or reducing it based on condition

• First right to renew before I listed it elsewhere

• Access to other rentals I had coming up if they were curious about moving within my portfolio

Step 4: The Creative Relief

Now here’s where I got a little creative—without hurting either of us.

This tenant had paid two months’ security deposit years ago. Over time, I saw how well they took care of the place—clean, maintained, no damage. Honestly, it was in better shape than when they moved in.

So instead of playing hardball, I made a gesture:

“I know this year has been tough. So here’s what I’m going to do—I’m refunding $1,000 of your deposit early. You’ve earned it with how well you’ve maintained the home. We are still going to increase the rent by $100, but I wanted to show that I see the effort and care you’ve put in.”

Boom. That $1,000 cost me nothing long-term (I was going to refund it eventually anyway), but it created instant goodwill. The tenant felt seen. Understood. Valued.

And guess what? That small act—paired with transparency and logic—made the rent increase land softly. No issues. No hesitation. They even thanked me.

Step 5: The Result

No drama. No “I’m moving out tomorrow.” They signed the new lease and even told me they appreciated the way I handled it.

They felt heard, and I protected my cash flow. That’s what I call a win-win.

Lessons Learned

• Transparency wins. Don’t just say costs went up—show the bills.

• Be flexible. You can hold your ground and still meet people halfway.

• Use deposits creatively. If the property’s in great shape, partial refunds can be a strategic goodwill tool.

• Rely on comps, but don’t worship them. Know when to think beyond the spreadsheet.

• Treat people like people. It costs nothing to have a conversation instead of sending a cold notice.

Why This Matters for Investors

If you’re building a portfolio—especially with BRRRR, subject-to, or creative deals—your margins depend on smart rent strategy. Tenants are not obstacles; they’re your partners in cash flow.

Don’t leave money on the table. Don’t lose great tenants over poor communication either.

Raise your rents. Just do it like a human.

Keep it consistent, stay patient, stay true—if I did it, so can you! Ready to connect and strategize? Contact me at http://graystoneig.com/ceo – Jorge Vazquez, CEO of Graystone Investment Group & its subsidiary companies and Coach at Property Profit Academy.

Contact our Team of Experts!

Meet Cody Bergstrom, Your Expert in Finding Deals

Meet Lisa Kaye Price, the LendingGig Top ML

Jay Michalec – COO & Property Management Expert at Graystone.

Our Top Articles 

Property Profit Academy:
✔ Learn to buy properties with little to no money down.
✔ Build a $10M portfolio step by step.
✔ Master strategies like BRRRR and house hacking.