There's a reason why nearly eight million people live in New York City. The city that never sleeps is truly one of a kind. Unfortunately, it's also quite expensive both to live and own property there.
Because of that many New York City landlords will need to raise rents this year. Unfortunately, this can be a delicate line to walk. You want to reasonably raise rent without scaring off existing or new tenants.
That's why it's important to know how to calculate rent increases properly. In this rent calculation guide, we'll go over some strategies so you can make sure that you can profit from your NYC apartments and homes.
Know the Laws
In New York City you can't just raise the rent as much as you'd like. There are laws in place stipulating how much you raise each year.
Specifically, a new law was passed that says landlords can raise their rent by no more than 3% for a one-year lease contract after the first renewal. Keep in mind that it's different for a two-year lease renewal.
In these cases, you can only raise rent by 2.75% for the first year, and 3.20% after the second year. If you try to go over these amounts you could end up in legal trouble.
Do Your Research
Just because you can raise your rent by 3% after the first year doesn't necessarily mean you should. It's a tough market out there and attracting tenants can be a challenge for some landlords.
Because of this, we recommend doing some research. Look into the local market conditions and what similar rental units are charging before you determine rent increase. You also need to take into account how much you can afford each month.
If you're relying on your rental income boost you might not have as much wiggle room. If you can, consider keeping your rent the same. Or only raise it by 1% or 2%. These rental increase tips can go a long way toward keeping your good tenants.
Consider Hiring a Property Management Company
Calculating a rental increase can be challenging. There are a lot of factors you need to consider. Even harder is getting your tenants on board with the rental increase.
If you don't have the time or energy to do this, consider hiring a full-service property management company. Not only will these companies use their property management skills to help with rental increases, but they'll also assist with every other aspect of running the property.
That includes things like maintenance requests, accounting, marketing, and evictions if they're needed. It can make your job as a NYC landlord a lot easier and less stressful.
Need Help Learning How to Calculate Rent Increase? Contact PMI Paramount
We hope this guide helped you learn how to calculate rent increases. As you can see, rent increases aren't something you should do arbitrarily. That's why it's helpful to have the professional at PMI Paramount on your side.
With over two decades of New York real estate experience, we know everything there is about artfully increasing your rent. So if you're ready to start making more money, get in touch with us today.
