When to increase the rent?
There are many reasons why you may choose to increase the rent - and let's face it maintaining a rental property isn't cheap.
You might feel like you’re risking pushing tenants out with a rental increase, but most tenants understand that there comes a time when the rent will go up. It’s a part of landlording life, and there are ways to do it and ways not to.
Here’s our top 5 ‘ways to’:
'When you increase the rent the vast majority of properties on the market will have also increased their rent, so it’s unlikely to be the #1 move motivator. However if you've been neglectful with the general up-keep it may be a deal-breaker for some tenants.'
Regular small bites
If you suddenly whack a really good tenant with a huge rent increase, the chances of getting a ‘notice to leave’ form are pretty high. Much better is small but regular increases, so the tenant gets used to it but also feels they are being respected.The legals
The RTA stipulates you have to give 60 days written notice of any changes, and it’s better to give longer rather than shorter warning in any case. Once again, it’s about minimising the feeling of surprise. Also for rent to be increased, it must be at least 6 months since the last increase.Maintain the Relationship
If you're seen to be proactive and responsive to any fix-it issues, your tenants will be impressed. Heck they likely will stay longer too! AND our hunch is that they are then more open to fair rental increases. Just like you want a good tenant they also want a landlord who keeps the property to a high standard.Capital improvements
Don’t forget that improvements like adding aircon or security screens not only create a great opportunity for upping the rent but also add long term capital value to your property…win/win!Consult with your PM
Your property manager isn’t just there to organise inspections and monitor maintenance concerns. They also are across many rental properties and will have a good deal of knowledge about market rates.Rented below market?
If you feel your property is rented below market, there are some key times to bring it into line.
After your tenant has exited and your property is up for a re-let is a great opportunity to make a larger increase. It’s also smart to consider when you want your renewals to come up to maximise returns. For example, a property with a pool coming up for renewal in spring/summer has a greater chance of achieving higher rents.