Real estate has long been a favorite American investment. 28% of Americans name real estate investing as their preferred investment choice. More than half the country owns real estate in some form.
However, owning investment properties comes with many challenges. In many cases, investors who own these properties become landlords.
This position entails many responsibilities, such as maintenance, tenant screening, and more. Landlords must perform rent collection to make a profit from these endeavors.
Sometimes, landlords must raise rent to make these profits. However, many Colorado investors may wonder, "How much can a landlord raise rent by?"
Different states have varying laws regarding rent increases. We'll discuss Colorado's laws in this guide!
How Much Can a Landlord Raise Rent by in Colorado?
Colorado's rules on raising rent are fairly lax. The state legislature forbids Colorado cities from implementing rent control.
So, a Denver investor could theoretically raise rent without facing any caps. However, the state does enforce some rules to protect Denver tenants from facing unforeseen rent hikes.
First, a landlord cannot raise the rent more than once a year. This law applies to oral agreements as well as written leases.
You may have an oral rental agreement with your tenants about rent. If so, you must give at least 60 days written notice before you increase the rent.
A written contract functions a little differently. Your tenants become liable to the conditions prescribed in your rental contract.
For example, your lease may specify that the rent will increase at a given time in the future. In this instance, your lease is the written notice.
Limits for Landlords Raising Rent
Colorado does have some limits in place for landlords when it comes to raising the rent. First, Low-Income Housing Tax Credit buildings have specific guidelines affecting their leasing rates.
Landlords can only raise the rent in these buildings if they follow the government's guidelines. The rent increases must also track the Area Median income. This income rate changes annually but usually remains stable.
However, a building that moves out of this tax credit status loses these protections. If you own a building that loses these safeguards, you can raise rent to any price you want. However, landlords should keep these rates aligned with your rental value.
Government housing projects, such as Public Housing or the HOME program, only allow rent to be one-third of the tenant's income. The only exceptions are if the tenant's rent and income are substantially small.
How to Ensure You Receive Your Rent
The Internet has many articles with landlord tips about receiving your rent payments on time. One frequent suggestion is to hire a property management company.
These businesses oversee your rent collection, property accounting, rental inspections, and more. These experts can also help you decide the best rental rates for your business.
Our property management services have helped several Denver landlords manage their buildings. We provide real estate tips for several issues.
So, if you're wondering, "How much can a landlord raise rent by?" create an account with us today! We can help you navigate the best rental rates for your buildings.