When to Implement a Rent Increase


Tenants beware: This blog is not catered to you.


A lot of landlords sacrifice a better return on their real estate investment in order to avoid rocking the boat with their loyal tenants. There are many reasons why that sacrifice should not be made, with most being outside of your control including: inflating property taxes, utility costs, insurance premiums, and overall cost-of-living expenses. Another expense to factor into whether or not to raise rent during tenant turnover or lease renewals is if you've made any significant upgrades to the property while the current tenants were living there. OR, planning to make those upgrades would provide a good incentive for tenants to resign and agree to pay that increased rent price.

Maintaining a competitive rental price is key to managing a successful real estate investment property and getting a better return on your investment. But remember that while you are determining a rental price that meets your financial goals, your tenants are doing the same.


Rules & Regulations in Minnesota

Before deciding the rent increase for your property, there are a few regulations to keep in mind so that you stay out of legal, financial, and ethical trouble.

It is illegal to raise rent if:
Tenant Rights:

Minnesota tenants are provided certain rights once they sign a lease with you. It is illegal to raise tenants' rent due to any of the following scenarios as that would be considered landlord retaliation:

  • Filing a suit against the management or filing a complaint with Consumer Protection.
  • Exercising their First Amendment rights to assemble and present tenant collective views.
  • Complaining to the fire department, building inspector, health inspector, or a government agency about unhealthy, illegal, or unsafe conditions at the property.
  • Exercising their rights to withhold rent if you fail in your maintenance responsibilities.
  • Refusing your entry without proper notice. In Minnesota, you have to notify your tenant before entering their premises. The amount of notice depends on the circumstances of your visit. For routine purposes, you must provide your tenant with at least 24 hours’ notice prior to visiting them.
Rent specifics to include in the lease agreement:
  • If you plan on charging late payment fees.
  • The set rent price for a given period of time (i.e. 6 months, 1 year, etc.).
How much to raise and how often:

Minnesota provides no legislation on the frequency of rent increases nor a rent increase limit, so figuring out how much to ask for in a raising rent will depend on the market value of similar units in the area. Rental comps are a great place to start when looking for a good price point.

Notice Requirements:

The minimum notice in Minnesota is 30 days before the current lease agreement ends. For month-to month tenancies, it is 30 days from the next rent due date. In a mobile home park lot lease, the landlord must give 60 days written notice of the increase in rent, and may increase the rent only twice in any 12 month period.

Something to remember when it comes to proper notice: If the tenant objects to the increase in rent, the tenant cannot be bound to a new lease by implication. So you will need enough time for the tenant to respond to your rent increase notice and decide their next steps. If they opt to non-renew, then you'll need enough time to advertise the rental unit and screen prospective tenants.

Related Reading: Online Rent Collection Systems: We Found 3 You Can Use for Free


Raising the rent of your rental property does not make you the villain. Going about it the wrong way does. If you are still left with questions on proper real estate investing etiquette? Check out our Investment Real Estate Guide or Contact Us Today.


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