What is a reasonable rent increase?

It is natural to look for a benchmark, and you will find plenty of numbers quoted online. The trouble is that a percentage tells you how much your rent changed, not whether the result is fair. Two questions matter more.

Question 1: Where does the new rent sit against the market?

Compare the proposed rent with current listings for homes like yours: same bedroom count, similar size and condition, close by. Three outcomes are possible:

• Above comparable rents. The increase is pushing you past what a new tenant would likely pay. This is where negotiation has the most room.
• In line with comparable rents. The increase brings you to market. You can still ask for a smaller step or better terms, but expect less movement.
• Below comparable rents. Even after the increase, you would pay less than the market. The increase may be reasonable from the landlord's side, though a phased increase is still worth asking about.

Question 2: Does a legal limit apply to your unit?

Some states and cities cap annual increases for certain units, and set notice periods that must be given first. Where a limit applies, it defines the maximum the landlord can charge, whatever the market says. Coverage usually depends on the location, age and type of the building.

Other things that make an increase more or less reasonable

• Your current rent. If your rent has not changed in years, a large increase may be catching up rather than overreaching.
• What else changed. New fees, or services you used to get included, are part of the increase even if the base rent looks modest.
• The condition of the unit. An increase is harder to justify when repairs are outstanding or the unit is behind what comparable listings offer.
• Vacancy around you. Many similar units sitting empty nearby suggests the market cannot support higher rents right now.

An example

Two renters each receive a 7% increase. The first pays $1,500 in a building where comparable units list around $1,750; after the increase she would still pay less than the market. The second pays $2,400 where comparable units list around $2,350; his increase pushes him well above it. The percentage is the same. Only the second has a strong market case to push back.

How to check yours

1. Write down the current rent, proposed rent and any fee changes.
2. Find five to ten current listings for comparable homes nearby. Our guide to rental comps explains what to include.
3. Compare the proposed rent with the typical comparable, not the cheapest one.
4. Check whether any local limit or notice rule applies.

If the increase looks above the market, read how to negotiate it. If it looks fair, this guide helps you decide whether to accept.

How CounterRent helps

The free check compares your proposed rent with ranked comparable rentals near your address and tells you how confident that comparison is, so you can see which of the three situations above you are in.