How much can I increase my rent?
Many landlords would be wondering about this at the moment with the interest rate increases that there have been.
Most tenants would expect an increase if they have been in a property for a year, but unreasonable increases can cause problems with existing tenants.
If a rental agreement is being renewed with the same quality tenants a landlord has to weigh up the fact of keeping a good tenant or increasing the rent substantially and risk them leaving. Should they leave then the next problem might be “can the higher rental being sought be achieved anyway?” so has a good tenant been lost to no avail.
For the last 3 years rents have been increasing at an average rate of 7%, but this is ‘average’. There have been some areas where the increase has been more and some where the increase has been less. At least this will give some indication but it also comes down to rental demand in the area in which the rental property is held.
Property values appear to keep rising and property investors will be looking for that 3 to 5% return on investment.
Another consideration is the fact that we have probably not seen the last interest rate rise so that has to be taken into account as well. The timing of a rental increase is something to consider: now or later!
Filed Under: Property Investment Tips
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