Renting out your Detroit 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 Detroit, Michigan.
Let’s dive in!
How Much Can You Increase Rent?
Detroit, affectionately known as “Motor City”, is a vibrant and rapidly growing metropolis. Known for its diverse neighborhoods, rich history, and affordable real estate market, it has become a popular destination for individuals and families seeking an urban lifestyle. With its quickly healing economy and numerous job opportunities, the city has experienced a surge in population, resulting in increased demand for housing.
If you’re a landlord in this growing metropolis, you might find yourself wondering, “how much can you increase rent in Detroit, Michigan?”
The number one thing you need to know: There is no rent control in Michigan, so there are no specific rent increase laws in Detroit. This means that, as a landlord, you have the flexibility to determine the appropriate rental amount based on market conditions and factors such as costs and inflation.
However, it's essential to remember that regardless of the percentage increase, you must still comply with fair housing laws. These laws prohibit discrimination, so make sure that you are not singling out certain residents or protected classes when raising rent.
Researching the local real estate market and analyzing rental prices in your area can give you a better understanding of what other landlords are charging for similar properties, allowing you to gauge the competitiveness of your property.
If you have recently made significant improvements or renovations to the rental unit, it may be justifiable to increase the rent to reflect the added value. However, it's important to strike a balance between recouping your investment and ensuring that the rent increase remains reasonable and fair for your residents.
Property taxes can also impact the amount of rent increase. If they have increased significantly, it may be necessary to raise the rent to cover this expense.
Inflation can also play a role. As the cost of living rises, it may be reasonable to adjust the rent to keep up.
Ultimately, when deciding to increase rent in Detroit, it's important to weigh these various factors so you can make an informed decision that is fair to both you and your residents.
When Can You Increase Rent?
When it comes to increasing rent in Detroit, there are no specific time restrictions as long as the landlord has included such a provision in the lease. Otherwise, the landlord must wait until the end of the lease. In any case, a 30-day notice is required. Providing notice well in advance allows your residents ample time to adjust their budgets and make any necessary arrangements.
By including a rent increase clause in the lease agreement, you can notify your residents in advance about the possibility of a rent increase. This transparency fosters open communication and helps maintain a positive landlord-resident relationship.
Keep a copy of the rent increase notice for your records as evidence of proper notification in case of any disputes or misunderstandings in the future.
While the ability to increase rent provides landlords with a means to adjust for inflation or changing market conditions, it is essential to approach this matter with fairness and understanding.
How Do You Increase Rent?
Begin by researching the local rental market to determine if your proposed increase is in line with the current rates to ensure your increase is reasonable and fair.
Next, draft a formal notice to inform your residents of the rent increase. Include the effective date of the increase, the new rental amount, and any other relevant details. Provide a clear explanation for the increase, such as rising property maintenance costs or inflation.
Finally, deliver the notice to your residents personally or by certified mail.
Note: A Detroit property management company can help when it comes to setting rent rates, collecting rent, raising rents, negotiating lease terms, and more.
Giving Notice of Rent Increase
If there are specific notice requirements outlined in the lease agreement, such as a required number of days' notice or a specific method of delivery, be sure to follow those instructions. By providing clear communication and allowing sufficient time for residents to prepare, you can create a harmonious and mutually beneficial living arrangement for both parties involved.
When preparing the rent increase notice, clearly state the reason for the increase and provide a sufficient notice period as required by law. Typically, thirty days' notice is required for month-to-month tenancies.
After preparing the notice, send it to your residents using a method that allows for proof of delivery.
Final Thoughts: Rent Increase Laws in Detroit, Michigan
For a landlord in Detroit, understanding the laws impacting rent increases is crucial for avoiding legal issues and maintaining positive relationships with your residents. So, as a landlord, familiarize yourself with the rent increase laws, take the necessary steps to ensure compliance, and maintain open communication with your residents.
Looking for a professional property management company to help with setting and raising rents? Contact our Detroit team today!
