rent goes up

[addicted]

hi all i have an ip i bought almost a year ago it had renters in already ,i am wanting to raise the rent by 10 dollars a week ,i am managing it my self ,and just wanted to know do i have to make a new lease that the rent will be 10 dollars more on paper ,or would a letter to the tenant be enough they are under no lease now as it expired in november

 

[Jas]

If they are on a month by month, you don't have to write up a new lease.

I wold offer one thou, having tenants locked in for a year is a good thing. And if they refuse, you know you'll be looking for new tenants soon and can budget accordingly.

Jas

 

[geoffw]

You could suggest $20 increase for month by month, or $10 for an annual lease.

Make sure you've done your research on the area though- make sure you are not overcharging or undercharging. That's where a PM comes in handy. My PM has just put through $10pw increase of each flat in a block of eight- I would not have done that, through lack of knowledge. The $38 pw she gets is worth every cent!

 

[D.T.]

If PM's are on a percentage of the rent, how do you know she isnt suggesting an increase in rent just to increase her income?

 

[JoannaK]

Originally posted by dtraeger2k
If PM's are on a percentage of the rent, how do you know she isnt suggesting an increase in rent just to increase her income?

If a property manager is managing a property and getting paid 7% commissions, I'm sure they're not suggesting a $10 increase for the sake of an extra 70 cents commission!

Addicted, make sure you do give the tenant the required notice in writing before you increase the rent, otherwise, if you ever end up in the tribunal you'll have to pay the total amount of the increase back to the tenant!

A letter of increase is sufficient, a new lease does not need to be drawn up.

 

[addicted]

no there is no property manager ,,i am it when i was buying the ip the agent told me that the rent has not gone up for a couple of years and an increase of 10 dollars would be ok . i didnt put the rent up at that stage ,because i thought i might scare the tenants away ,,,so ,,,,now,,, i thought might be a good time it has been almost a year since i bought the ip

 

[geoffw]

Originally posted by dtraeger2k
If PM's are on a percentage of the rent, how do you know she isnt suggesting an increase in rent just to increase her income?

I rely on a PM to know the market, and to know what the rents are. If a PM charges too much, I'll lose my tenants.

One unit becoming vacant will be put on the market at $15 rise- if that was over the market, potential tenants would merely go to another unit somewhere else.

Addicted, have you researched rents in the area? A $10 rise might be short changing yourself, or it may be over the market.

In the ACT, the notice required for a change of rent is six weeks ot two months- not sure which- make sure that you give thre required notice period for your state and/or lease.

 

[JoannaK]

Hi Addicted,


You're in NSW, so I'm assuming your property is also in NSW.

You must give the tenant 60 days notice in writing on your intention to increase the rent.

You must deliver the notice to the tenant (NOTE: you can not slip it under the door - it is considered to be undelivered) OR

You can post the notice and keep a record of you posting it. If you do this, you need to add on an extra 5 days for postage.

You do not need to sign a new lease with the tenant, but if you want to, and the tenant agrees, you can sign the lease immediately with the rent increase written in to the special conditions. Just make sure the tenant signs the special conditions.

A rental increase letter is attached

 

[JoannaK]

special conditions for rent increase to insert in new lease attached

 

[XBenX]

nice Jo K are they standard letters or something you've made up ?

 

[JoannaK]

Hi XBenX,

I set up and ran a business that specialised in residential property management, so any forms I post to the forum are forms that I have personally used in my business (in NSW) and still use for my own ppties. Most have been viewed by the Tribunal and given the OK (ie not questioned)

 

[XBenX]

and you've got no problems w/ the forum using them - very generous

thanks

 

[addicted]

thanks guys for all your help , on my question .i printed out the forms, and they are great with all the advice and help that you guys have given me ,makes me very determand to keep on going
in what i am doing ,i think this forum is so great and every one here is so helpful a BIG thanks to you guys

 

[itinerantotter]

dtraeger2k - sounds like a win/win situation to me!!

 

[addicted]

since making this post i have rung a few re in the area and to my surprise $180 is resonable for the ip i was told ,so i put the rent up to $170 im not that gready with an option to make a new lease if they wish to do so ,so now i am waiting for a reply

 

[JustAMum]

Joanna K
Thanks for sharing those letters.
It is great to see what others are doing/done.

Thanks for improving my and my tenants world.

JAM