How to Tell a Long-Term Tenant Their Rent Is Going Up Significantly
For context, we rent out storage units to small businesses. We started a couple of years ago, but over the years we’ve realized that our prices were significantly below the market rate compared to similar units in our region.
For new tenants, we are already charging roughly twice what we originally charged, and they are completely fine with the price because it is still a fair market rate.
However, I now have to tell a long-term tenant that his rent will increase significantly. Before anyone asks: the current rental agreement is coming to an end, and he will be coming to our home to sign a new agreement. This gives us the opportunity to bring the rent in line with our current pricing.
Does anyone have any tips on how to handle a conversation like this, especially when you know the tenant probably won’t be happy about the increase?