The Ethics of Rent Increases: People Over Profit
As landlords, we're in business to make money. That's not controversial—it's reality. But we're also in the business of providing homes, and that comes with a responsibility that goes beyond the bottom line.
The question isn't whether you should ever raise rent. The question is *how* and *when* you do it, and whether you're treating your tenants as partners in a mutual arrangement or as a resource to be maximized.
Profit Is Valid, But It's Not Everything
Let's be clear: wanting to earn a return on your investment is completely reasonable. You've put capital at risk, you maintain the property, you deal with repairs and regulations. You deserve to be compensated for that.
But the moment you start viewing rent increases purely as an opportunity to extract maximum value from someone's housing situation, you've crossed a line. You're no longer a landlord—you're a predatory one.
Housing isn't like selling widgets. When you raise rent on a tenant, you're not just affecting their budget. You're potentially forcing them to choose between paying you and affording groceries. Between staying in their community or uprooting their family. Between stability and chaos.
That doesn't mean you can never raise rent. It means you need to think carefully about *why* you're doing it and *how much* is justified.
When Rent Increases Are Justified
Not all rent increases are unethical. Here are situations where raising rent makes sense:
1. Your Costs Have Genuinely Increased
If property taxes went up 10%, insurance doubled, or you've made significant improvements to the property, it's reasonable to pass some of those costs along. Just be transparent about it.
"Your rent is increasing by $100 because property taxes went up $1,200 this year" is a conversation. "Rent's going up" is a decree.
2. Market Rates Have Shifted Significantly
If you've kept rent flat for years while the market moved, a gradual increase to get closer to market rate is fair—*gradual* being the key word.
Going from $1,200 to $1,800 overnight because that's what the unit next door rents for is predatory. Going from $1,200 to $1,300 with six months' notice is reasonable.
3. You're Underpriced for the Value You Provide
If you're maintaining the property exceptionally well, responding to maintenance requests quickly, and providing real value, and your rent is well below market, a modest increase is justified.
But "value" means something. If you're a slumlord who ignores repairs and your tenants are miserable, you don't get to raise rent just because the market allows it.
How to Raise Rent Ethically
If you've determined that a rent increase is justified, here's how to do it right:
1. Give Maximum Notice
Check your local laws, then *exceed* them. If the law requires 30 days' notice, give 60 or 90. Give your tenant time to adjust their budget, find extra income, or start looking for alternatives if they need to.
2. Be Transparent
Explain *why* the rent is going up. Share the numbers if you can. Tenants are much more understanding when they see the reasoning.
"I need to raise your rent by $75 because property insurance went up $900 this year" is a lot easier to accept than a vague "market adjustment."
3. Keep Increases Modest
Even if the market would support a huge jump, consider keeping increases small and regular rather than shocking and rare. A $50 increase every two years is much easier to absorb than $200 every five years.
4. Consider Your Tenant's Situation
If you know your tenant is struggling, think hard about whether this is the right time. Yes, you're running a business, but you're also human. A little compassion goes a long way.
This doesn't mean you never raise rent on someone going through hard times. It means you consider the timing and the amount, and maybe you offer a payment plan or a smaller increase.
5. Reward Good Tenants
If you have a tenant who pays on time, takes care of the property, and causes zero problems, *that has value*. Keeping them is worth more than squeezing an extra $100/month and risking turnover.
Vacancy costs you money. Repairs from bad tenants cost you money. Tenant screening costs you time. A reliable, long-term tenant is worth keeping even if it means leaving some money on the table.
The Long-Term Calculation
Here's the thing most predatory landlords don't understand: treating your tenants well is good business.
When you're fair, transparent, and compassionate, you get:
- Longer tenancies (lower turnover costs)
- Better property care (tenants treat it like home)
- Faster rent payments (people prioritize paying someone they respect)
- Better word-of-mouth (good tenants refer friends)
- Legal protection (tenants don't look for reasons to sue you)
- Peace of mind (you can sleep knowing you're not ruining lives)
When you maximize profit at your tenant's expense, you get:
- High turnover (vacancy periods kill cash flow)
- Property damage (angry tenants don't care for your property)
- Late or missing payments (people delay paying someone they resent)
- Legal issues (desperate tenants withhold rent or sue)
- Reputational damage (angry tenants leave reviews)
- Guilt (if you have a conscience)
The landlords who get wealthy and stay wealthy aren't the ones who squeeze every dollar. They're the ones who build relationships, maintain properties, and create win-win situations.
The Bottom Line
You can be profitable *and* ethical. In fact, being ethical often makes you more profitable in the long run.
Raise rent when it's justified. Be transparent about why. Give maximum notice. Keep increases reasonable. Consider your tenant's situation. Reward loyalty.
And remember: your tenants aren't just revenue streams. They're people whose lives are affected by your decisions. Treat them accordingly.
Be a landlord people respect, not one they fear or resent. That's how you build a sustainable, profitable, and ethical rental business.
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*RentPager helps landlords manage properties with transparency and communication at the core. We believe better tools create better relationships between landlords and tenants.*