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We recently had our tenant's 12 month lease end and we decided not to increase the rent. They are good tenants and cause us no trouble (and no grief even though the oven AND the hot water cylinder broke in the time they've been there) so we wanted to sweeten the experience and hope they would stay.
Not a landlord, but a tenant, we expect a rent rise around the time our lease is up for renewal, so every 12 months. We've been here 12 months and our rent just got increased $5 from $325 to $330 for our 3/4 acre block. We are quite happy about it, the rent is also about $100 under average for the area, so we were expecting at least $10 increase, and would have paid a lot more. They also gave us 2 months notice (is that the new legislation now?). The PM told us they landlords were very happy and wanted us to be happy as well, which is a nice thing to hear :-) I guess it depends on the average for the area. Some people will stay just so they don't have to move again, but others will consider moving again because of rent increases if they can find an equivalent property for less than the proposed rent.
Yes I would. If they recommend it, and you could benefit, why not?
Tenants will always complain about a rise no matter when it occurs or how much it is, that's just how it goes.
At the end of the day, it's your property they are living in.
We've been renting this place for 6 yrs and its only gone up $30 a week in that time. We don't complain when it goes up.. We well know the market around here and they are being very reasonable with their increases. If I was a landlord I'd be more interested in the steady income than rocking the boat by constantly upping the rent.
We had the landlord visit at Xmas time, they're lovely and we're both happy with how things are going. They have no immediate plans for the house and we have no immediate plans to move either! Yay :)
As a tenant I'd say do it at 12 months and keep an eye on the rental market to be sure it's reasonable and not just because you can.
I think it's great you're thinking of the tenants tho. It's a two way street keeping everyone happy. Disgruntled tenants can suddenly find lots of repairs that need doing lol.
our lease said we would have rent increases up to twice a year (12 month lease) so we expected it after 6 months - we didn't get one until 12 months in (and then only $5 per week)
if their lease says it will likely go up after 6 months, they are probably expecting it. if you're worried about upsetting good tenants, cut the increase in half maybe??
maybe have a look on realestate/domain and check out the going rental amount for other houses in the market at the moment. no point increasing rent and pricing yourself out of tenants - but also no point ripping yourselves off - you have expenses too hun
It's pretty standard to increase rent $5-10 each time the lease is up for renewal. Of course this is only in an increasing market, not a staggnant one. The risk you run with not increasing a little each time, is that when you do try to catch up to the rest of the market the gap may be too big to bridge and you may not be 'allowed' to increase by the amount needed to get it back up to market price.
My sister is my tenant, and although we do rent to her significantly under market value, she is fully aware that the rent will be increasing every 12mths (given the rental market here, she will still be way below market rent even as hers increases).
Having said that, you are the landlord, you can call the shots, if you don't feel comfortable increasing, don't. Or perhaps only increase by half of what the REA suggests.
So many responses! Thanks everyone :)
The house is currently let at $270 pw, with the average for the area being $310. On the one hand, ours is a little run-down, but on the other hand, it's on over 1000sqm and we pay for the lawn upkeep, the tenants don't hafta worry about it. I don't know if I'm trying to justify myself or making good points to be honest. I'm probably just overthinking the whole thing.
Its not to some, but needing a 3 brm home it can be a bit hard to downsize. $10 a week can break the bank in some cases.:
Our rent increased from $255 to $265 after 12 months, then they wanted to put it up to $280. They decided to sell instead, but I would've had to move out anway. I couldn't afford that amount.
If you think its reasonable, its within your rights to do it, especially if you could do with the money. If property value around you is increasing & your house is keeping up with that value do it. Make sure all repairs are carried out though... drove me nuts that my LL's were happy to increase my rent, but couldn't put a screen door on the front of my house. Also took 6 months for them to fix my clothes line that sagged to the ground.
Sounds like a bit of a bargain! We pay someone to do our mowing, and that's easily $80 per month during summer months. If you're doing the upkeep of the lawns, that's saving time and money for the tenants right there. I'd go for it since you're under market price already. Like BG said, if you feel uncomfortable with the rise, maybe do 1/2 now and another 1/2 in 6 months. Or you could leave it and do a bigger increase at 12 months. Don't rip yourselves off though :)
I think the thing with 6 month increases is with the notice that you give for the increase, it would feel like you start paying the increased rate and you're no sooner issued with notice for the next increase. A larger increase at 12 months would sit better with me as a tenant... but hey... I'm just a tenant. As everyone says, landlord calls the shots.... don't mind us tenants! :)
BTW - a Landlord is not allowed to increase the rent by such a significant amount in one hit. You could have gone to tribunnal over that.:
Went through rta and they could because it was off lease and they gave appropriate notice.
:(
I think those are good points. Surely you have already built lawn care into the rental cost if it's something you expected to pay for? Our place was originally rented at $20 per week OVER what we hoped to get so that was a factor in us not increasing the rent.:
If your PM is recommending a $10 increase then I would probably do it. It does sound like your tenants are getting a bit of a bargain!
If you feel uncomfortable about raising the rent after 6 months then maybe increase it for more after 12 months instead (like $15?).
Thanks for all your replies peeps :) We ended up telling the agent to keep it as is if the current tenant re-signed, or raise it if the tenant is leaving. The deciding factor - apart from me being a big softie - is the works we'll be doing to the block over the next 6 months, they could be annoying if any of the tenants are home through the day, so it's a bit of a sweetener :)
Up until a couple of months ago, we were a landlord and we often came across your predicament. It was quite a simple decision for us. We had excellent tenants, who never caused an issue, and for us an extra $500 a year wasn't going to make a major difference to our mortgage, and we would much rather happy tenants then ones who would contact us over every single issue.
One of my friends tenants use to contact them every time they needed a light globe changed!!
Seems our landlord doesn't like us much for asking for a replacement stove (because the old one leaked and couldn't be fixed) and having a bathroom lamp removed (at our own cost but not replaced - he had to replace it) because it BURNT a hole through the wiring.
We got lumped with a $20 a week increase!! We are happy to say good riddance, we had a terrible agent and now for $10 more we can rent a brand new house in our area. But of course I think that's what they want
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