Rental Increases
- Thread starter rollyt
- Start date
the tenants hate you already, but if you have good proof that the rents have gone up and if you are willing to loose your tenant ( as some will leave just out of spite - even if they have to pay more somewhere else ) and a few weeks or more rent waiting for a new tenant - then by all means put your rent up.
if you do not increase you rent you will be left behind and miss out in vital income to service your loan and maintain / improve your property to keep rentable
and the tenant won't appreciate it anyway.
if you do not increase you rent you will be left behind and miss out in vital income to service your loan and maintain / improve your property to keep rentable
and the tenant won't appreciate it anyway.
Just write a letter explaining you are putting the rent up because of the prevailing economic conditions. If you are putting it up to market rent, say so.
If going above market, make sure you have a good reason in the letter.
If they do move out, they have to give you notice, and you can either renegotiate, or start advertising.
Jas
If going above market, make sure you have a good reason in the letter.
If they do move out, they have to give you notice, and you can either renegotiate, or start advertising.
Jas
Hi Rolly
Why do you think your tenants will get upset if you increase the rent?
Do you honour your responsibilities as a landlord and maintain the property and respond immediately to any emergencies?
If so then it is only reasonable to expect them to pay a fair market rent.
If they are way under market rent then they would of course respond better to gradual increases.
If the rent is at or below market what would motivate them to leave? Especially if the service you provide is aobove average.
Why do you think your tenants will get upset if you increase the rent?
Do you honour your responsibilities as a landlord and maintain the property and respond immediately to any emergencies?
If so then it is only reasonable to expect them to pay a fair market rent.
If they are way under market rent then they would of course respond better to gradual increases.
If the rent is at or below market what would motivate them to leave? Especially if the service you provide is aobove average.
Sim
Administrator
Along with what everyone else said, also make sure you do your research properly - in a lot of areas we are at or near the peak of the current property cycle, and rents are dropping in many areas.
Trying to put your rent up now may be a fatal move for your ability to find and keep tenants - but that really depends on the area. If you can justify it and if you are confident in getting new tenants if need be at the higher price, then go for it.
Trying to put your rent up now may be a fatal move for your ability to find and keep tenants - but that really depends on the area. If you can justify it and if you are confident in getting new tenants if need be at the higher price, then go for it.
I'm with Sim.
Rolly, you say the market has boomed. But that may well be just the prices paid for property. The rental may not have increased at all with increased prices- it may have actually decreased.
Like everyone else says- look at the market in the area where you have properties. There are areas of the market where vacancies are high and rent is dropping (eg Sydney inner city apartments, from what I understand). If the properties are managed, a good property manager will know what reasonable rents are. Possibly, a tenant in place will pay a little more not to have to move- but probably not too much.
Rolly, you say the market has boomed. But that may well be just the prices paid for property. The rental may not have increased at all with increased prices- it may have actually decreased.
Like everyone else says- look at the market in the area where you have properties. There are areas of the market where vacancies are high and rent is dropping (eg Sydney inner city apartments, from what I understand). If the properties are managed, a good property manager will know what reasonable rents are. Possibly, a tenant in place will pay a little more not to have to move- but probably not too much.
Hi y'all,
I'll say it again in this thread for those who missed it elsewhere.
Property prices are NOT related to rental income, or vica versa for that matter!
Property prices predominantly reflect serviceability and rents predominantly reflect affordability.
The boom = prices = serviceability
Rents = take home pay
It's really that simple. How else can anyone explain property yields halving in the last two years? Property prices up 30% in two years CPI 7%, propert prices double in 5 years and CPI up 23% (all figures approx due to the ingestion of a good bottle of red).
Rolly, I assume that like the rest of us you have had capital gains of some 20% or more in the last year alone. Can you put your rents up 20% or more? I doubt it if you have had regular rent reviews. You can try for a rent increase but is it worth the vacancy factor?
As for ruk from fnq "As ye sow ....." I am sorry your tenants don't like you. My tenants think I am the best thing since Che or Mao, and pay premium rents for the privelige of my performing a social good!
Good luck Rolly you can only play it by ear, I've put some of my rents up by 5% others by 10% but it is on a case by case basis.
regards, Michael Croft
I'll say it again in this thread for those who missed it elsewhere.
Property prices are NOT related to rental income, or vica versa for that matter!
Property prices predominantly reflect serviceability and rents predominantly reflect affordability.
The boom = prices = serviceability
Rents = take home pay
It's really that simple. How else can anyone explain property yields halving in the last two years? Property prices up 30% in two years CPI 7%, propert prices double in 5 years and CPI up 23% (all figures approx due to the ingestion of a good bottle of red).
Rolly, I assume that like the rest of us you have had capital gains of some 20% or more in the last year alone. Can you put your rents up 20% or more? I doubt it if you have had regular rent reviews. You can try for a rent increase but is it worth the vacancy factor?
As for ruk from fnq "As ye sow ....." I am sorry your tenants don't like you. My tenants think I am the best thing since Che or Mao, and pay premium rents for the privelige of my performing a social good!
Good luck Rolly you can only play it by ear, I've put some of my rents up by 5% others by 10% but it is on a case by case basis.
regards, Michael Croft
B
brains
Guest
Why do your tennants think you are the best thing since two commiunist icons of the 20th century?
