The Art of the Rent Increase: How to Raise Your Tenant’s Rent (the Right Way) Without Losing Good Tenants

Ah, the annual rent increase: that magical moment when landlords everywhere rehearse speeches in the mirror, tenants brace themselves for bad news, and everyone collectively wishes the rent fairy would just sprinkle more cash around instead. If you’re a landlord, you know the struggle—how do you do the right thing for your investment without sending your best tenants packing?

Let’s face it: there’s a right way and a wrong way to approach raising rent. The wrong way involves surprise letters and awkward silence. The right way? Well, that’s what we’re here to master! With a dash of humor, a sprinkle of empathy, and a big dollop of best practices, you can increase your tenant’s rent while keeping everyone happy (or at least not plotting your demise).

Yes, There Is a Right Way to Increase Your Tenant’s Rent: The Golden Rules

You’re not the villain for wanting to increase rent. The market evolves, property taxes climb, maintenance costs never stop, and maybe you’ve made some upgrades. The goal? To keep your investment profitable while holding onto happy, reliable tenants. Here’s how to walk that tightrope:

1. Know Your Local Laws (And Don’t Mess Around!)

First things first: before you even think of raising rent, get cozy with your provincial and municipal regulations. In Alberta, for example:

• Rent can only be increased once every 12 months per tenancy.

• You must provide written notice at least three full tenancy months in advance for periodic tenancies.

• For fixed-term leases, increases can only be applied at renewal—not mid-lease.

  
  

Pro tip: Violating these rules isn’t just bad form—it can get you slapped with fines or forced to roll back the increase.

2. Timing Is Everything

Ever tried asking for a favour when someone’s having a bad day? Same logic applies here. The end of a lease or during renewal is usually prime time to discuss a rent increase. Avoid springing this news on tenants during major holidays or after a recent maintenance issue.

Suggested Timeline for Rent Increases:

• 70 days before lease expiry: Review market rents and notify property owner.

• 60 days before lease expiry: Offer renewal to tenants, outlining the new rent (with or without an increase).

• 50 days before expiry: If declined, start advertising the unit.

  
  

This advance notice gives tenants time to plan, budget, and—if needed—make alternative arrangements.

3. Do Your Homework: Let the Market Guide You

Raising rent just because you feel like it? That’s a quick way to a vacancy. Instead, research comparable rentals in your area. Check platforms like RentFaster.ca, Kijiji, and RentBoard. Look beyond just asking prices—see what units are actually leasing for.

Consider:

• Location perks (near transit, schools, shopping)

• Unit size and features (number of bedrooms, included utilities, parking)

• Recent upgrades (energy-efficient appliances, smart home tech)

  
  

If you’re offering something unique, you might justify a slightly higher rent—but don’t stray too far from the market average, or you’ll price yourself out.

The Human Element When Increasing Rent

Let’s get real—money talk can be awkward. But tenants are far more likely to accept a rent increase if you approach it with empathy and clarity.

1. Be Transparent and Honest

Don’t just drop a number—explain the “why.” Maybe your property taxes went up, or insurance premiums jumped. Maybe you invested in better security or brand-new appliances. Lay it out in plain language.

Example Communication:

“We’ve completed several upgrades to improve your living experience—including new energy-efficient lighting and enhanced security systems. These improvements, along with increased property taxes, mean a modest rent adjustment is necessary.”

2. Show Appreciation

Tenants aren’t just dollar signs—they’re the ones keeping your property in good shape and rent payments flowing. A little gratitude goes a long way.

• Thank them for being reliable, respectful tenants.

• Acknowledge their positive contributions (on-time payments, keeping the unit tidy, being good neighbours).

  
  

3. Offer Options (When Possible)

If you’re increasing rent, consider sweetening the deal:

• Offer a longer lease at a modest increase to lock in stability for both parties.

• Include extra perks (free parking, upgraded appliances, or professional cleaning before move-in).

• Allow for a phased increase (e.g., a smaller increase now, another in six months).

  
  

Flexibility shows you care about their needs as much as your own.

The Practical Steps: How to Deliver a Rent Increase Like a Pro

1. Draft a formal written notice (email or letter), clearly stating:

   • Current rent

   • New rent amount

   • Effective date

   • Reason for the increase (optional, but recommended!)

   • Contact info for questions

2. Deliver the notice according to legal requirements (registered mail, email with read receipt, or personal delivery).

3. Be ready to answer questions—some tenants will want to discuss or negotiate. Be open, but stick to your research.

4. Document everything—keep copies of notices, correspondence, and any agreements made.

   
   

What NOT to Do: Rent Increase Fails You Should Dodge

• Don’t surprise tenants with a last-minute hike.

• Don’t single out tenants unfairly (no selective increases).

• Don’t ignore maintenance requests or let the property slide—tenants expect value for their money!

• Don’t get emotional or defensive if tenants push back. Stay calm, professional, and solution-oriented.

  
  

Sample Scripts and Templates

Sample Notice Letter:

Dear [Tenant Name],

We hope you’ve enjoyed your tenancy at [Property Address]. As your lease is coming up for renewal on [Date], we want to inform you of a change in the monthly rent. Effective [Date], the new rent will be $[New Amount] per month.

This adjustment reflects current market rates and recent property improvements. We appreciate your tenancy and hope you’ll choose to renew.

Please contact us with any questions or to discuss renewal options.

Sincerely,

[Property Manager Name]

FAQs: Your Burning Questions About Rent Increases Answered.

Q: Can I increase the rent in the middle of a lease?

A: In Alberta, rent increases can only be applied at the end of a fixed-term lease or with proper notice for periodic tenancies. Both fixed term and periodic tenancies only allow for one increase within the last 12 months.

Q: How much can I increase the rent by?

A: There’s no legal cap in Alberta, but increases must be reasonable and justifiable by market conditions. Excessive hikes may drive tenants away.

Q: What if my tenant refuses the increase?

A: If they don’t agree to the new rent, they may choose to move out at the end of the current lease. Start advertising early to avoid vacancies.

Q: Should I ever negotiate on the rent increase?

A: If you value the tenant and they make a good case, consider negotiating. Retaining a great tenant can be worth a slightly lower increase.

Q: Is it better to do small annual increases or larger, less frequent ones?

A: Small, predictable increases are generally easier for tenants to accept and plan for, and they keep your rents aligned with the market.

Conclusion: Raising Rent Without Raising Hackles

At the end of the day, yes, there is a right way to increase your tenant’s rent—one that respects both your bottom line and your tenant’s peace of mind. By staying informed, communicating openly, and valuing your tenants as true partners, you’ll not only keep your investment thriving but also build long-lasting relationships with the people who call your property home.

Remember: A good tenant is worth their weight in gold. Don’t risk losing them over a poorly executed rent increase. Take the time, follow the rules, and approach the conversation with care—and you’ll likely be rewarded with both loyalty and profitability.