What Is a Reasonable Rent Increase in 2024?

Last Updated: November 30, 2023 by Jessica Menefee

A reasonable rent increase can vary based on your local rental market. The average rental rate increase is 2% to 3% per year. However, in recent years some states, such as Florida saw an increase of 45.77% in just a three-year span.

How to Determine a Reasonable Rent Increase

To determine a reasonable rental increase in your area, you should:

Calculate Expenses
Assess Your Property
Identify Local Market Values
Review Local Laws

Calculate Expenses

It is essential to use your operational expenses as a starting point to help you determine a reasonable rental rate. Many expenses that landlords pay rise from year to year so it’s important to complete a review every 6 months to a year. These expenses may include:

Mortgage payments
Property taxes
Utilities
Maintenance
Insurance
License Renewal
Fees (HOA or COA, if applicable)
Marketing and advertising
Tenant screening
Property management service (if you use one)

After you have calculated your expenses, compare this price to your rental price. How much profit are you getting? Don’t forget to leave enough room to cover the cost of an emergency repair or other issues such as tenant eviction.

note

The average return on investment (ROI) for residential properties is 10.6%. If you’re earning significantly less than this amount per year, you’re likely justified in raising the rent.

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Assess Your Property

Take a critical look at your property. Have you kept it in a condition that could withstand a rent increase? It is important to consider what your current or future tenant would consider valuable about your unit and location. Here are a few questions to consider:

Is the property well maintained? Does your property look clean and pristine or could it use a few hours of yard maintenance and a fresh coat of paint?
Have you recently added upgrades? A property with newer features such as an updated chef’s kitchen and spa-like bathroom will rent for a higher price than a dated 70’s style home with old shag avocado green carpet.
How would you rate your property’s location? Consider the location of your home, does it offer anything special compared to other homes in your area? Does it have top-rated schools or a nearby park? Is it gated, have good security features, or considered a safe neighborhood?
Are you planning to make upgrades and improvements to the home? Planned upgrades and improvements can help defend a reasonable rent increase.

Identify Local Market Values

Determining the current rental rates of comparable properties can help you discover what a reasonable rent increase would look like.

Try to find at least 5 comparable properties nearby and calculate the differences in prices and if possible, time on the market. Raising your rental price only pays off if you can keep your tenants or fill vacancies fast.

When searching for comparable properties, be sure to compare features like:

Lot size
Number of beds and baths
Age of unit and upgrades
If the unit has access to amenities like a gym, pool, or clubhouse
Walkability score

Review Local Laws

Most property owners have a good idea about the local laws in place that prohibit or limit raising the rent price. However, laws and local ordinances can change frequently. Be sure to research your local laws and ensure you can raise your rental price and by how much.

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Average Rent Increases Across the United States

The average rental price nationwide in the fall of 2023 is $1,978 compared to $1,667 in October of 2020. Researching the increases in your area can help you determine if your rental prices are on par with current state-wide prices.

Check out the table below for HUD’s determination of Fair Mark Rent in each state from 2020 to 2023.

State	2020	2023
Alabama	2-Bedroom: $701 4-Bedroom: $1,065	2-Bedroom: $839 4-Bedroom: $1,243
Alaska	2-Bedroom: $1,288 4-Bedroom: $1,950	2-Bedroom: $1,338 4-Bedroom: $2,226
Arizona	2-Bedroom: $917 4-Bedroom: $1,429	2-Bedroom: $1,080 4-Bedroom: $1,802
Arkansas	2-Bedroom: $672 4-Bedroom: $1,032	2-Bedroom: $768 4-Bedroom: $1,167
California	2-Bedroom: $1,446 4-Bedroom: $2,328	2-Bedroom: $1,668 4-Bedroom: $2,619
Colorado	2-Bedroom: $1,008 4-Bedroom: $1,587	2-Bedroom: $1,276 4-Bedroom: $1,989
Connecticut	2-Bedroom: $1,294 4-Bedroom: $1,907	2-Bedroom: $1,559 4-Bedroom: $2,326
Delaware	2-Bedroom: $1,073 4-Bedroom: $1,698	2-Bedroom: $1,253 4-Bedroom: $1,910
Florida	2-Bedroom: $992 4-Bedroom: $1,574	2-Bedroom: $1,209 4-Bedroom: $1,879
Georgia	2-Bedroom: $788 4-Bedroom: $1,231	2-Bedroom: $966 4-Bedroom: $1,463
Hawaii	2-Bedroom: $1,798 4-Bedroom: $2,926	2-Bedroom: $1,951 4-Bedroom: $2,996
Idaho	2-Bedroom: $793 4-Bedroom: $1,286	2-Bedroom: $961 4-Bedroom: $1,583
Illinois	2-Bedroom: $787 4-Bedroom: $1,163	2-Bedroom: $882 4-Bedroom: $1,282
Indiana	2-Bedroom: $782 4-Bedroom: $1,165	2-Bedroom: $912 4-Bedroom: $1,348
Iowa	2-Bedroom: $729 4-Bedroom: $1,077	2-Bedroom: $849 4-Bedroom: $1,230
Kansas	2-Bedroom: $752 4-Bedroom: $1,125	2-Bedroom: $836 4-Bedroom: $1,229
Kentucky	2-Bedroom: $699 4-Bedroom: $1,051	2-Bedroom: $823 4-Bedroom: $1,229
Louisiana	2-Bedroom: $820 4-Bedroom: $1,228	2-Bedroom: $892 4-Bedroom: $1,332
Maine	2-Bedroom: $849 4-Bedroom: $1,263	2-Bedroom: $1,045 4-Bedroom: $1,523
Maryland	2-Bedroom: $1,243 4-Bedroom: $1,947	2-Bedroom: $1,383 4-Bedroom: $2,112
Massachusetts	2-Bedroom: $1,588 4-Bedroom: $2,196	2-Bedroom: $1,893 4-Bedroom: $2,624
Michigan	2-Bedroom: $773 4-Bedroom: $1,127	2-Bedroom: $923 4-Bedroom: $1,333
Minnesota	2-Bedroom: $823 4-Bedroom: $1,272	2-Bedroom: $963 4-Bedroom: $1,479
Mississippi	2-Bedroom: $703 4-Bedroom: $1,043	2-Bedroom: $816 4-Bedroom: $1,178
Missouri	2-Bedroom: $700 4-Bedroom: $1,062	2-Bedroom: $818 4-Bedroom: $1,246
Montana	2-Bedroom: $809 4-Bedroom: $1,286	2-Bedroom: $892 4-Bedroom: $1,402
Nebraska	2-Bedroom: $724 4-Bedroom: $1,063	2-Bedroom: $855 4-Bedroom: $1,214
Nevada	2-Bedroom: $905 4-Bedroom: $1,454	2-Bedroom: $1,191 4-Bedroom: $1,945
New Hampshire	2-Bedroom: $1,089 4-Bedroom: $1,687	2-Bedroom: $1,365 4-Bedroom: $2,011
New Jersey	2-Bedroom: $1,467 4-Bedroom: $2,159	2-Bedroom: $1,661 4-Bedroom: $2,388
New Mexico	2-Bedroom: $802 4-Bedroom: $1,296	2-Bedroom: $896 4-Bedroom: $1,447
New York	2-Bedroom: $1,076 4-Bedroom: $1,520	2-Bedroom: $1,280 4-Bedroom: $1,788
North Carolina	2-Bedroom: $799 4-Bedroom: $1,282	2-Bedroom: $947 4-Bedroom: $1,487
North Dakota	2-Bedroom: $766 4-Bedroom: $1,202	2-Bedroom: $879 4-Bedroom: $1,431
Ohio	2-Bedroom: $761 4-Bedroom: $1,107	2-Bedroom: $886 4-Bedroom: $1,265
Oklahoma	2-Bedroom: $728 4-Bedroom: $1,103	2-Bedroom: $838 4-Bedroom: $1,261
Oregon	2-Bedroom: $1,022 4-Bedroom: $1,704	2-Bedroom: $1,198 4-Bedroom: $1,977
Pennsylvania	2-Bedroom: $850 4-Bedroom: $1,217	2-Bedroom: $1,018 4-Bedroom: $1,465
Rhode Island	2-Bedroom: $1,108 4-Bedroom: $1,663	2-Bedroom: $1,453 4-Bedroom: $2,229
South Carolina	2-Bedroom: $788 4-Bedroom: $1,231	2-Bedroom: $960 4-Bedroom: $1,460
South Dakota	2-Bedroom: $749 4-Bedroom: $1,149	2-Bedroom: $861 4-Bedroom: $1,377
Tennessee	2-Bedroom: $757 4-Bedroom: $1,168	2-Bedroom: $894 4-Bedroom: $1,337
Texas	2-Bedroom: $829 4-Bedroom: $1,295	2-Bedroom: $978 4-Bedroom: $1,493
Utah	2-Bedroom: $850 4-Bedroom: $1,396	2-Bedroom: $1,010 4-Bedroom: $1,636
Vermont	2-Bedroom: $1,050 4-Bedroom: $1,494	2-Bedroom: $1,169 4-Bedroom: $1,646
Virginia	2-Bedroom: $992 4-Bedroom: $1,571	2-Bedroom: $1,116 4-Bedroom: $1,739
Washington	2-Bedroom: $1,069 4-Bedroom: $1,742	2-Bedroom: $1,265 4-Bedroom: $2,056
West Virginia	2-Bedroom: $726 4-Bedroom: $1,116	2-Bedroom: $810 4-Bedroom: $1,214
Wisconsin	2-Bedroom: $800 4-Bedroom: $1,180	2-Bedroom: $929 4-Bedroom: $1,343
Wyoming	2-Bedroom: $846 4-Bedroom: $1,423	2-Bedroom: $907 4-Bedroom: $1,502

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When Can a Landlord Raise Rent Prices?

Landlords can typically only raise rent at the end of a lease.

Suppose it is month 10 of a 12-month apartment lease. A tenant receives a letter stating that if they re-sign the lease and stay in their current unit, the lease price will increase from $1,500 to $1,575.

The landlord has offered approximately 60 days’ notice and followed all legal guidelines to raise the rental price.

In a month-to-month contract, a landlord can effectively raise the rent whenever they want.

When Can a Landlord NOT Raise Rental Prices?

Landlords cannot raise rent in the middle of a lease unless there is a stipulation in the lease terms that allows it. This usually happens if the tenant wants to bring in a roommate or a new pet.

Landlords also cannot raise the rent due to discrimination, retaliation, or more frequently than what is allowed by their state or local laws.

How Much Can a Landlord Increase Rent?

The average rental price in the United States has risen to $2,011 in 2023. With the most significant increase in rental prices in the last few years, it is hard to know what to expect. Depending on the rental market, a “reasonable” rent increase may vary greatly.

Seven states (CA, MD, ME, MN, NJ, NY, OR) have rent control laws at the state or city level.

How to Notify Tenants of a Rental Increase

Offering tenants plenty of notice about the rent increase can be beneficial. Proper notification allows tenants to budget for an additional cost and allows them to research comparable properties. If tenants determine that your property is a fair price compared to similar properties, they will likely stay.

Landlords should give their tenants a formal rent increase notice in person, if possible, within the guidelines of your state. Many states require a 30 – 60-day notice before the increase.