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The lease on our house is up for renewal early next month, and our PM is recommending a $10 pw increase.
I feel awful even thinking about it. Yes, we could definitely use the money, even though it's only $10 a week - and won't even end up being that because of the PM fees. But then I think about the tenants, who haven't given us a whiff of trouble over the last 6 months, and I feel awful.
Thoughts from other landlords? How do you feel about raising the rent?
I'm not a landlord, but have they only been tenants for 6 months? As a tenant, I'd feel a bit jibbed having my rent increased so soon. After 12 months,I wouldn't really have an issue. $40 p/m should not be breaking people's banks, and if it is then they're likely living beyond their means and should consider downsizing. Even if I had just been there 6 months, it wouldn't be a super huge deal. It's not a significant increase.
I'm not sure what it's like where you are but $20 is the average rent raising per year. So for me $10 for 6 months seems about right.
My hubby is the same he doesn't want to raise it and I do! I guess $10 is not much but if the banks drop their interest rates this week the timing might be a bit off :)
Also not a landlord, but when we signed our most recent lease, the agent advised us to expect a raise every 6 months. Sure not all owners do, but it's fairly much the norm to raise it $5-$10 every 6 months. I won't be super thrilled if it happens to us, but I'm expecting it to happen so we've planned for it.
Honestly......i would be quite upset if i had only been there 6 months and it was upped. I would probably also be a little worried that they would continue to up it every 6months too.
Also how does upping the rent work with what a home is valued at when you first choose to rent it out? Just curious is all. Most people when looking do try to stay in their budget,so if the rent gets upped every 6months that must be a little tough.
As a landlord, I prefer to only raise the rent at the end of a lease. So if it's 6 months or 12 months - that's the tenants choice. We go by RE recommendation. I've also been a renter & had the rent upped on us mid-way through a 12 month lease. We were p'd off & ended up breaking our lease because of it (in part). So if they were only on a 6 month lease then ok but if it's mid way - no increase. It's business, & they will understand.
I have been a landlord for years and always kept the rent as stable with the good tennant. The not so good ones I upped it, but if I found a good one with no hassles I wanted to keep them :)
Upping the rent every 6 months in our old place priced us out within 18 months. Might have stayed there longer if the rent remained reasonable.
It's been a while since I rented but we only ever saw an increase at the end of 12 months. If they're a good tenant, I'd consider leaving it until then.
Sometimes things aren't as simple as living within means. We moved out of a rental because the rent went up, not unfairly, but we were trying to save for both our wedding and our own house and we weren't prepared to pay any more.
I think I'd prefer a $15-20pwk increase at 12 months rather than a $10pwk at 6 months as a renter myself, to be honest. With a bit of advance warning that it's on the cards. That said, our R/E advised they'd increase by $20pwk at our lease renewal but haven't actually done it that I know of...maybe they like us?
it is completely your call.
When we had great tenants we didnt raise it in 2 years - (and that was when rates were on the rise!).we were grateful for tenants who cared for the house.
Our current tenants no so much - we have spent $4000 this year on improvements which we cannot claim for them and we have put up the rent $20 a week over a 12 month term
our rent went up at our current place after our 6 month lease by $5 a week and i dont know if its going up in june but im pretty sure it isnt coz we had about 3 months notice so not sure maybe at the end of the lease
As a landlord we put it up annually rather than every 6 months.
Just make sure the tenants think its worth paying that little extra, if you want to keep them. Part of why we're moving now is because the rent went up last year and we've realised the house is nowhere near big or nice enough to justify it. Technically our new house is more expensive per month (I have NO idea how they've worked it out!) but we reckon it's worth paying it.
The first place we lived together was a junky granny flat in someone's backyard, and they started raising the rent every six months by $20! By the time we moved out - the week after Ianto was born - we were paying something like $300p/w for this THING someone shoddily put together out of their garage. We'd been trying for months to get out, but no-one would take us :(
Coming from a renter - it depends on the market. We had our first increase of 20% (yes percent) after 4 years, which we were angry about because it was so much, then $10 6 monthly - by the time we left we were still very much under market value and the rent was advertised at $40 a week more than what we were on.
I agree, if you have good tenants keep stable but if it means a massive increase at some point do it in increments.
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the worst rent increase we had, was after 12months, they landlords let our lease roll onto periodical and 6 weeks after dd was born raised it by $80 a week. from $370 to $450. (talking 2006 here too). they wanted to sell the place and needed it to have a good rental income to make it appealing.
Needless to say we couldnt afford it after dropping to 1 wage, and moved out - within a week there were new tenants paying $450~!
supply and demand i guess
As a landlord I review the rent each 12 months (given that is the lease time) - depends what you agreed in the lease I guess
Re the amount - depends on the base amount - $10 per week on a $200 per week is a different story to $10 per week on a $1000 per week. What does your agent suggest?
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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