I haven't seen anyone yet who would prefer to pay more rent....they'd rather spend the money on the latest electronic gadget or a holiday
Tenants dont wish to pay rent increase!
- Thread starter JCM
- Start date
True...
However, there are tenants I classify good.
For example, if I find a tenant who never complains and if there is a small issue with the property he takes care of it himself and looks after the place I let his rent be under market a little bit.
Those tenants are hard to find and when I find them I like to keep them.
I also have a soft touch for tenants with health issues or temporary problems so I'm gentle to people who need time to get back on their feet. (btw I think most landlords would do the same).
The rest of them will get their normal increases and if they don't like it there are more properties out there.
You are employing a professional eg your PM and he is working for you, he or she sounds excellent by telling you to put the rent up = DO IT.
When and if tenants move out - other properties to rent will be higher than your property to rent so tenants will THINK about moving for a while.
Interest rates have gone up, council rates have gone up, building insurance has gone up.
If you don't put the rent up in a few years time you will be selling a bargain IP (because your rental yield will have dimished to about 1-2%) to someone else and they will buy with vacant possession, put in new tenants at correct market rent price and have a rental yield of + 6%.
Friend of mine has quite a few IP's and his PM puts the rent up $5.00 each 6 months on all properties.
Regards
Sheryn
PS
I did have one lot of tenants in an IP that couldn't afford rental increases basically because one partner lost their job and in my opinion they had rented an IP they could afford in the first place (newish 4 bedroom house in new subdivision) large fenced yard for their dog + the Austar monthly rental was more important than the nice house they were renting from me.
So they moved out to an older rental place and have since told most old neighbours they wished they hadn't. Of course they had Austar install on the IP they moved into.
Thanks all great feedback and lots of food for thought!
I guess it is always important to keep a good relationship with the tenant and to come to some type of compromise when it comes to situations like this, but this is not the case here. They are just not willing to take a $5 increase let alone a $10 or $15. Yes i believe the tenant should have a say, but if the landlord can justify the reasons for the increase and not just for the purpose of lining his/her pockets then both parties should be able to come to an agreement.
This has not been the case here and so i was somewhat surprised when the PM informed me that the tenants informed they could not afford any increase whatsoever.
So it is a tough decision as they have been good tenants but at the same token it is an indication that they are not willing to budge regardless of whether my costs as a landlord keep increasing.
Thanks once again for the feedback!
John
I guess it is always important to keep a good relationship with the tenant and to come to some type of compromise when it comes to situations like this, but this is not the case here. They are just not willing to take a $5 increase let alone a $10 or $15. Yes i believe the tenant should have a say, but if the landlord can justify the reasons for the increase and not just for the purpose of lining his/her pockets then both parties should be able to come to an agreement.
This has not been the case here and so i was somewhat surprised when the PM informed me that the tenants informed they could not afford any increase whatsoever.
So it is a tough decision as they have been good tenants but at the same token it is an indication that they are not willing to budge regardless of whether my costs as a landlord keep increasing.
Thanks once again for the feedback!
John
You seem to be very new at this LL thing?
Eventually you will not care so much about your tenants and "I believe tenants should have a say" attitude.
We started out that way, and they stab you in the back whenever it suits them. They will all think you are rich..even if they have more disposable income than you.
Hi John,
Funamentally, I think this is where a lot of investors go wrong.
Investing is a business, with the sole purpose of "lining the landlord's pockets". Every for-profit business has or should have the same purpose. To increase to wealth of the business owner(s). Otherwise, what's the whole point of it?
The tenant should not have a say, as they have the right to move somewhere else that is cheaper. It is their decision. As a landlord, I am not interested in justifying the rent I charge for my property. I know how
I have arrived at the price, after taking into consideration all the different variables; interest rates, local competition, vacancy rates etc.
As far as raising the rent goes, I would definately do it now...keeping it in line with the market.
Think of it like this...
You have to be kicked in the nuts 100 times...do you cop the whole lot in one session, or do you cop one every 6 months or so, thereby giving the "old fellas" a chance to get over the pain? Sorry ladies, this is sort of a man's analogy, but I'm guyessing you all get the drift!
Anyways. I know which option I would go for!
Boods
Boods,
LOL !!!!
We increase our rents whenever possible.
We have some properties where we can do faster than others.
I personally find it easier between tenants.
If it is a tenant I have found to be a problem, increasing rent is an easy way to move them along.
saying this, if rental increases are warranted, do it
occassionally , we have reduced rents, when the market tells us.
LOL !!!!
We increase our rents whenever possible.
We have some properties where we can do faster than others.
I personally find it easier between tenants.
If it is a tenant I have found to be a problem, increasing rent is an easy way to move them along.
saying this, if rental increases are warranted, do it
occassionally , we have reduced rents, when the market tells us.
That was my immediate thought too.
Compromise? I never compromise. When allocating what tasks are to be done at work, does your Boss compromise and let you off from doing the tasks that you don't wish to do? I bet the answer is no! Look at it the same way. You set the rents, they pay. Simple as that. If they don't like it they can move elsewhere.
Why on earth would the tenant get a say? Owning rental properties is a Business. Does your Electricty company have to justify to you why they are putting up prices? NO! It is a commercial enterprise, entered into for profit exactly the same as having IPs, except on a much larger scale.
I think you need to ask yourself why you decided to invest in property. Did you do it for your own benefit and wellbeing? To help or fully fund your retirement? To give you or your family a better lifestyle in years to come? OR did you do it to help and assist someone else. To provide a low cost roof over the head(s) of someone in need. To personally help fund their lifestyle and allow them to either live in a better home or neighbourhood than they could otherwise afford, or to allow them to have the funds to pay for those little extras in life that they could not do without your help?
I know exactly why I invest in property.
Jaycee
The Mogul
http://www.moviefone.com/movie/the-mogul/1028760/main
is the name of the movie you are referring to.
Skater,
You are exactly right.
We have properties that offer a variety of accommodation.
Some were specifically bought for a tenant..and we always make sure our decisions to buy these properties make money for us.
For this we tell them it is based on the asking price on RE.
If we negotiate a lower price, we DO NOT pass along that saving, and we tell them that.In this case the tenant has replaced the roof,repaired septic, and all other maintenace and repairs.
We have also agreed to extend the date with which they need to buy..only after we found out the penalty if we sell early
They think it is because we are nice...we are.. but that's beside the point.
So yes..
JCM needs to harden up. This is a business, and never forget that.
You are exactly right.
We have properties that offer a variety of accommodation.
Some were specifically bought for a tenant..and we always make sure our decisions to buy these properties make money for us.
For this we tell them it is based on the asking price on RE.
If we negotiate a lower price, we DO NOT pass along that saving, and we tell them that.In this case the tenant has replaced the roof,repaired septic, and all other maintenace and repairs.
We have also agreed to extend the date with which they need to buy..only after we found out the penalty if we sell early
They think it is because we are nice...we are.. but that's beside the point.
So yes..
JCM needs to harden up. This is a business, and never forget that.
Having had my council rates go up $200 from last year and my Victorian water rates increased by $360 per year thanks to a water desalination plant that the tenant will get the benefit of rather than the landlord. I tried to put up my rent by $20 a week as I normally put it up $10 but wanted to recoup the increased costs I am experiencing from the tenant. Real Estate manager told me if I put it up to much the tenant can complain to consumer affairs and the consumer affairs investigate if the rent is fair or not.
If you increase the rent by $20 and this brings it in line with the market, there is no problem. Let them complain. I hardly think that consumer affairs would be in any position to make a decision as to the fair rental value of your particular property to within $10...
Do you believe the rent increase is fair and reasonable?
Boods
The money is not for personal use. Its for investment purposes and as such comes out of your 'investment Loc'. Easy peasy.
Why use your money when you can use OPM.
Using your money only cuts into your lifestyle budget.
I dont know about you but I invest to enhance my lifestyle not hinder it.
Yep! I have one property that has gone up $20pw every six months for the last few increases. It will go up another $20 at the next increase. I have others that go up $5pw, not because I'm scared of the tenant or the tribunal, but because that is in line with market.
So long as you are not trying to set the rent well over and above what is fair and reasonable for a similar property in a similar neighbourhood, why would the tribunal have call to step in and reduce rates?
The concept is simple - its just people's perception of it that complicates things.
I know what you are saying, however I also know that some people's eyes will glaze over at the sight of mathematical symbols.
I was trying to give another perspective that hopefully anyone could understand.
Sadly, I am sure that some won''t understand my perspective either. That's life!
dumpster, with respect, I think this one sentence reflects two errors commonly made when deciding what rent to ask. It's nonsensical to have a fixed amount by which you 'usually' raise rent, and irrelevant to refer to your increasing holding costs.
The only thing that's relevant is market rental for your property at that time.
LMAO!!!!hehehe...you said "dumpster"!!
duCKster, I most sincerely apologise. I blame it on having three tween-aged boys in my home. Sorry. That definitely wasn't intentional.
