puttin' up the rent

hi all

its coming up to the time of year when my tenants lease is up.

my IP is currently about $40 under market rent (it has been a 385pw 12 month lease)

ive spoken with my agent and they have suggested raising the rent to 400 by January (giving 2 months notice to current tenant)

I have no problem with having it slightly under market rent as I figure if the tenant moves out I will lose at least a weeks rent (for the sake of say $10pw)

so what Im asking is should I be aiming for 410-420pw and acheiving as much as I can with IR's on the up, or settling for 20pw under market rent?

any input is appreciated
tab
 
If you settled for $20/wk under market rent you would miss out on $1040 on a 12 month lease, assuming you didn't put it up during the year.

If you put it up to $410/wk and your tenant moved out, you would lose (presumably) $410 in the letting fee, plus however long it takes to find a new tenant. It would only take 1.5 weeks of the property being vacant before you would have lost the same $1040.

If you think you can get your property re-rented real quick then it would make sense to put the rent up to market value, but if things are a little slow in your area you might want to settle for a safer bet and stick with a cheaper rent.

Besides, if you've got good tenants looking after the place it's probably worth hanging on to them, and cheap rent is a good way to go about it!
 
Check Realestate.com for rents in your suburb. That's a good indication. Ring a few agents and see if there is much available.

I wasn't going to put mine up then I looked at what was available for the same price and mine was MUCH better.

Tenants won't move out if properties to move to are the same price (or dearer). It is a hassle moving for them too. Hire removal trucks etc.
 
Tenants won't move out if properties to move to are the same price (or dearer). It is a hassle moving for them too. Hire removal trucks etc.

I keep all mine to market rates for this exact reason. Even if they don't like the increase, they always pay rather than move, unless they were going to move anyway.
 
$20 increase now and another $20 in six months

My suggestion is to increase the rent to $405. Increase being half of what you say market rent is. If they want a lease, then I would ensure that there is another $20 increase after 6 months written into the same lease.

If they baulk at that, don't agree to a lease, and increase the rent in six months in anycase. Have done this twice previously.
 
thanks guys,

after looking at re.com a bit more the minimum for a surrounding apartment is 410 and thats without a car park. the apartments witha pool and a gym are going for minimum of 440.

so i think ill be heeding advice given and going for a rise to 410 with a further 10 in 6 months.

cheers
tab
 
Top