The Dos and Don’ts of Rental Increases

As a landlord in the competitive rental market of Portland, Oregon, staying informed about the dos and don’ts of rental increases is essential for maintaining a prosperous and sustainable property management strategy. Portland’s unique real estate landscape requires landlords to approach rent adjustments with care, balancing the need for profitability with the responsibility of providing fair and affordable housing. 

With our experience in managing Portland rentals and rental increases for many years, Rent Portland Homes Darla Andrew’s Office has a lot of advice to offer. So, let’s explore the essential dos and don’ts that landlords should consider when contemplating rental increases in the City of Roses.

How Does Portland’s Rent Control Work?

Portland is well known for its regulations on rental increases. However, the requirements go much deeper than simply limiting how much you can increase your rent. To maintain a successful Portland rental, you have to keep in mind all of the following considerations when raising your rent: 

Notice Period 

Landlords in Portland are generally required to provide at least 90 days written notice for any rent increase. This notice period applies to month-to-month tenancies. Remember, landlords are not permitted to raise rent during the first year of a tenancy.

Annual Limit on Rent Increases 

Portland uses rent control, which caps the rent increase at 7% plus the Consumer Price Index. As of 2024, the allowable rent increase is capped at 10% annually. This means that landlords cannot increase rent by more than 10% in a 12-month period. However, this percentage may be subject to change, so it’s essential to check for the most up-to-date information.

Exemptions 

Some properties may be exempt from the rent increase limit. For example, properties built after 2005 and those that have undergone significant renovations may have different regulations. Landlords should be aware of any exemptions that may apply to their specific properties.

Relocation Assistance 

In certain circumstances, if a rent increase forces a tenant to move out, landlords may be required to provide relocation assistance. This intends to help tenants with the costs associated with finding new housing.

Affordable Housing Protections 

Portland has implemented measures to protect affordable housing. Landlords with affordable housing units may be subject to additional regulations and restrictions on rent increases.

Once you’ve familiarized yourself with all the most up-to-date legal requirements, many nuances remain on how best to handle rent increases.

Dos for Landlords

Increasing rent is often necessary for landlords to maintain a long-term rental business, but the process can be stressful for landlords as well as tenants. However, rental increases don’t have to be a source of tension. By following some simple tips, you can make rental increases a stress-free and professional experience.

Understand Local Laws and Regulations

Before initiating any rental increase, landlords should have a comprehensive understanding of Portland’s rental laws and regulations outlined above. Familiarity with the maximum allowable rent increase, notice periods, and any restrictions on frequency is crucial. This knowledge ensures compliance with the law and helps landlords avoid legal complications.

Provide Advance Notice

After the first year of tenancy, Portland requires landlords to give at least 90 days’ notice for any rent increase in month-to-month tenancies. Offering a significant notice period not only complies with local regulations but also provides tenants with ample time to adjust their budgets or explore alternative housing options.

Communicate Transparently

Transparent communication is a critical factor in maintaining a positive landlord-tenant relationship. Clearly communicate the reasons behind the rental increase, whether due to rising property maintenance costs, property improvements, or market conditions. Open and honest communication fosters trust and understanding.

Invest in Property Maintenance and Upgrades

To justify a rent increase, landlords should invest in maintaining and improving their properties. Well-maintained and upgraded properties attract quality tenants and provide a solid justification for adjusting rental rates.

Offer Lease Renewal Options

Instead of relying solely on rental increases, landlords can explore lease renewal options. Offering tenants the opportunity to renew their lease at a reasonable rate can encourage long-term tenancies and reduce turnover, ultimately benefiting both parties.

Stay Competitive in the Market

Regularly assess the local rental market to ensure your rental rates remain competitive. Understanding the market trends allows landlords to set rents that align with the value of their properties, attracting tenants while maximizing returns.

Consider Tenant Profiles

Recognize and consider the financial capabilities of your tenants. Understanding your tenant demographic allows for more tailored and strategic rental adjustments that align with the economic realities of your renters.

Don’ts for Landlords

Sticking to the dos of rental increases will help you make the process go smoothly. However, you should also avoid certain actions that could inadvertently alienate your tenants—or even get you in legal trouble.

Implement Excessive Increases

Avoid implementing excessive rent increases that tenants may perceive as unfair or unreasonable. It’s important to strike a balance between maximizing profitability and ensuring that rental rates remain affordable for your tenants.

Retaliate Against Tenants

Engaging in retaliatory actions, such as increasing rent in response to a tenant asserting their rights, is not only unethical but also illegal. Landlords should refrain from any practices that may be perceived as retaliatory.

Neglect Property Maintenance

Raising rent while failing to address necessary maintenance and repairs can harm the landlord-tenant relationship. Regular maintenance justifies rental increases and contributes to tenant satisfaction and retention.

Disregard Tenant Concerns

Tenants may express concerns or seek clarification when faced with a rent increase. It’s crucial not to disregard their questions. Engage in open and respectful communication, addressing tenant questions or issues promptly.

Ignore Local Laws

Ignoring local rental laws and regulations can lead to legal consequences. Landlords must stay informed about any changes in the law and ensure that their rental practices align with current regulations.

Fail to Document Changes

Documenting all rent-related communications and changes is crucial. Whether it’s providing notice or discussing adjustments with tenants, maintaining a clear and documented record in your rent roll helps protect landlords in case of any disputes.

Want to Take the Stress Out of Rental Increases?

Strategic rental increases are a fundamental aspect of successful property management in Portland. By adhering to the dos and avoiding the don’ts outlined in this guide, landlords can navigate the rental landscape effectively, fostering positive relationships with tenants and ensuring the long-term sustainability of their rental properties in our vibrant city. And if you’re still feeling stressed about the prospect of raising rent, you can always let the professionals step in to help. With our long-term experience, Rent Portland Homes Darla Andrew’s Office can manage rental increases in a way that is sensitive to your tenants and smart for your rental business. For more information, call or text us at (503) 515-3170 or learn more on our website.