Renting a property can be a great way to earn income, but it’s important to know what you can and cannot do as a landlord. One question that often comes up is whether you can increase the rent on a rolling contract. The answer is yes, but there are some things you need to consider.
A rolling contract, also known as a month-to-month tenancy, is a type of rental agreement that automatically renews at the end of each month until either the tenant or landlord gives notice to end the tenancy. This type of agreement is commonly used when a tenant is not sure how long they will be staying in a property or when a landlord wants more flexibility in their rental agreements.
If you have tenants on a rolling contract, you can increase the rent, but you need to follow certain legal requirements. First, you need to give your tenants proper notice of the rent increase. This notice period varies according to the jurisdiction and is typically between 30 to 90 days. Check your local regulations to ensure compliance.
Also, the rent increase should be reasonable and in line with the market. Charging excessive rent is illegal and could result in legal action. To determine the fair market rent, research the local rental market and compare your property with other similar properties.
It’s also important to communicate the reason for the rent increase to your tenants. This can include a higher cost of maintenance or repairs, or an increase in operating expenses such as property taxes or insurance premiums.
If your tenants are on a fixed-term tenancy agreement, you cannot increase the rent until their contract expires. However, if they renew their contract, you can increase rent at that time.
It’s essential to have a clear and concise rental agreement that outlines the terms and conditions of the tenancy, including the rent amount, payment schedule, and any increases. This document should be signed by both parties, and both parties should keep a copy.
In summary, as a landlord, you can increase the rent on a rolling contract, but you need to follow the proper procedures and regulations. Be sure to research your local regulations, give proper notice, and ensure that your rent increase is reasonable and in line with the market. By doing so, you can maintain a good relationship with your tenants and ensure that your rental property is profitable.