Renting out your property can be a lucrative investment. But if you want to maintain your yields, you’ll probably need to increase the rent once in a while.

Rent increase laws can vary between cities and states, and as a landlord in Houston, it's crucial to understand the regulations surrounding rent increases. Knowing how much you can increase rent, when you can do it, and how to properly notify your tenants will help you navigate this aspect of property management with confidence. In this article, we will discuss these key points to help you stay informed and compliant with rent increase laws in Houston.

How Much Can You Increase Rent?

When considering a rent increase, you might wonder how much you can actually raise the rent. In the state of Texas there is no rent control, so there are no specific limits on how much you can increase rent in Houston. 

While you have the freedom to determine the amount of the increase, it's wise to consider market rates and avoid drastic jumps that could erode your competitive edge or negatively impact your relationship with tenants. It is also important to make sure that you do not engage in practices that could be construed as discriminatory or retaliatory as it could be a violation of state law.

Keep in mind that tenants are usually willing to pay a higher price for a better product. Consider the condition of your buildings, the amenities that you offer, and the customer service you provide. A high level of responsiveness and professionalism plus modern amenities and well maintained properties will help you attract good tenants and command top of the market rental prices. 

When Can You Increase Rent?

As a landlord, you need to be mindful of when you can legally increase the rent. Typically, rent increases are subject to the terms of the lease agreement. If your lease agreement has a fixed-term, such as a one-year lease, you cannot increase the rent until the lease term expires, unless the lease specifically allows for rent increases during the term.

However, if your lease agreement is month-to-month, you have more flexibility. Houston does not have rent control measures in place, so landlords are generally free to increase the rent with proper notice. Texas law requires a minimum of 30 days notice, although it is advisable to give tenants more time to prepare for the change.

How Do You Increase Rent?

Implementing a rent increase in Houston requires following a few essential steps. First, review the lease agreement to ensure that the rental increase does not violate any pre-agreed terms. Once you have established that you are good to go, you can take the following steps:

1. Research market rates: As mentioned earlier, it is important to determine a reasonable increase by considering market rates for similar properties in your area. Conducting a thorough comparative analysis can provide valuable insights into what other landlords are charging for similar units, helping you set a competitive rental price.

2. Prepare a written notice: Draft a written notice to inform your tenants of the upcoming rent increase. Ensure that the notice includes the current rent amount, the new amount, and the effective date of the increase. Clearly outlining these details can help prevent any confusion or disputes regarding the adjustment in rent.

3. Provide proper notice: According to Texas law, you must give tenants at least 30 days' notice if the rent increase is less than 10% of the current rental amount. For increases greater than 10%, you must provide 60 days' notice. This advance notice gives tenants the opportunity to adjust their budget and make informed decisions regarding their housing situation.

4. Serve the notice: Deliver the written notice to your tenant either in person or by certified mail with a return receipt to ensure proper documentation. Maintaining a record of the communication can serve as a legal safeguard in case of any future disputes or misunderstandings.

By following these steps, you can increase the rent in a legally compliant manner while maintaining a professional and transparent relationship with your tenant. Open communication and adherence to legal requirements are key to a successful rent increase process.

Giving Notice of Rent Increase

Sending a notice of rent increase is an important part of the process. Notifying your tenant in writing ensures that the communication is documented and provides your tenant with sufficient time to adjust their budget if necessary.

When delivering the notice, make sure to inform your tenant that the rent increase is intended to keep up with current market rates and cover increased operating expenses. This helps to establish transparency and understanding.

Final Thoughts: Rent Increase Laws in Houston

Renting out a property in Houston comes with certain responsibilities, including adhering to rent increase laws. Understanding how much you can increase rent, when you can do it, and how to properly give notice is vital for maintaining a positive working relationship with your tenants.

By staying informed about current rental market trends, following the proper legal procedures, and communicating transparently with your tenants, you can navigate rent increases successfully. 

Looking for a property management company in Houston to assist with rent collection, market insights, and more? Reach out to our local team to find out more about our services and how we can benefit your rental business!