Rent Increase Laws in Memphis, Tennessee

Rent Increase Laws in Memphis, Tennessee

Renting out your Memphis property can be a lucrative investment. But in order to maintain your yields, you’ll probably need to raise rent every once in a while.

That’s why landlords need to be aware of the local rent increase laws in their state or city. In this article, we’ll explore the sometimes-complicated but all-important world of rent increase laws in Memphis, Tennessee.

Let’s dive in!

How Much Can You Increase Rent?

Rent control is prohibited in Tennessee. As a result, in Memphis, there are no specific limits on how much you can increase rent. However, your rent increase needs to be reasonable and fair. A significant rent increase can lead to resident dissatisfaction and potential vacancies. 

It is crucial to consider the factors that can affect the rental market in the Memphis area. For instance, the economic climate can play a significant role—if the economy is thriving and the demand for rental properties is high, landlords may have more flexibility in raising rents. Otherwise, it may be smart to consider smaller rent increases to avoid alienating residents.

Another important factor is the condition of your rental property. If you have recently made significant improvements or added desirable features, such as updated appliances or renovated common areas, you may be justified in implementing a higher rent increase. These upgrades can enhance the value of your property and attract residents who are willing to pay a premium for the added amenities.

Researching the rental rates of similar properties can provide insights into what residents are willing to pay, allowing you to determine if your current rent is below market value and adjust accordingly. However, simply matching the highest rental rate in the area could lead to higher turnover and difficulty in finding long-term, reliable residents.

Consider the length of time since the last rent increase. If it has been several years, a larger increase may be warranted to keep up with inflation and rising expenses. However, if you have recently raised the rent or if the rental market is experiencing a downturn, implementing a smaller increase or even maintaining the current rent to retain residents and avoid vacancies may be the smarter option.

Lastly, it is important to communicate with your residents about the rent increase and provide them with sufficient notice. Open and transparent communication fosters a positive landlord-resident relationship and minimizes conflicts. Explaining the reasons behind the rent increase and addressing any concerns or questions your residents have can help ensure a smooth transition.

When Can You Increase Rent?

While there are no limitations on how much you can increase rent in Memphis, it is essential to understand when you have the right to implement a rent increase. Generally, landlords can increase rent at the end of a lease term. However, if your resident is on a month-to-month lease agreement, you can typically increase rent with proper notice, usually ranging from 30 to 60 days. It is essential to review your lease agreement and consult state and local laws to ensure you comply with the necessary requirements.

How Do You Increase Rent?

Increasing rent involves more than just informing your residents that their monthly payment will be higher. It is essential to approach the process in a professional and courteous manner to maintain good relations with your residents. Start by reviewing your lease agreement to ensure there are no provisions or restrictions regarding rent increases. If there are none, drafting a rent increase letter is the next step. This letter should clearly state the new rental amount, the effective date of the increase, and any terms or conditions associated with the increase. It is also essential to provide a reasonable explanation for the increase, such as rising property maintenance costs or market trends.

After drafting the letter, send it to your residents via certified mail or hand-deliver it to ensure the receipt and acknowledgment of the notice. Keep a copy of the letter for your records in case any disputes arise in the future. Give your residents ample time to adjust to the rent increase by providing them with at least 30 days' notice.

Note: A Memphis property management company can help with setting rents, raising rents, and more.

Giving Notice of a Rent Increase

As mentioned earlier, it is generally recommended to provide at least 30 days' notice for a rent increase. However, double-check your lease agreement and consult local laws to ensure you are meeting the necessary notification period.

In your rent increase letter, clearly state the effective date of the increase, giving residents ample time to prepare for the change in their monthly rent. Maintain open lines of communication with your residents, allowing them to ask questions and voice any concerns they may have. By addressing their concerns, you will build trust and foster harmonious relations with your residents. 

Final Thoughts: Rent Increase Laws in Memphis, Tennessee

Rent increase laws in Memphis, Tennessee provide landlords with the flexibility to adjust rental rates according to the local market. However, it is important to be aware of the potential impact of significant rent increases on your residents. By staying informed about the local rental market, following proper procedures for rent increases, and maintaining open lines of communication with your residents, you can navigate the rent increase process successfully.

Looking for a professional property management company to help with setting and raising rents? Contact our Memphis team today!