An escalation clause allows you to increase rent annually by a set amount or percentage, helping protect returns against inflation. Common in commercial leases, it’s increasingly used in residential contracts. For long-term tenants, it ensures steady rent growth and maintains profitability over time. Clearly define the increase amount and timeline in the lease. Tenants value predictability, and you benefit from higher future income. Escalation clauses are a proactive hedge against rising property taxes and maintenance costs. It’s a small contractual change with big financial impact.