Your Rental Investment - is it working as it should?...
Worried about offending good tenants who look after your property with a rent increase?
Those who are reluctant to raise rents in an effort to "keep the peace" are throwing money away. Most rentals are bought as investments and property owners need to ensure property managers, or themselves, are charging market rent in order for the property to maximise investment.
Market rent is often determined by comparable analysis to other properties of a similar type, size and location. The condition of a property is another consideration in setting the approriate level. A large number of property owners establish the correct amount by calling in a local property manager or a valuer. Regular and proactive maintenance will also ensure market value rent.
There is a correct process in advising tenants of a rent increase that needs to be followed. Rules differ depending on the type of tenancy agreed by both the tenants and the property owner, for example, if the tenancy is periodic, or 'fixed term' which involves specific dates.
Rent increases need to be weighed up with the current market, how good the tenant is and the appeal of the property for re-letting. Keep in mind respectable tenants are often worth more than a few dollars a week.
Knowledge and viewing similar properties to gain a true idea of what is being charged in the market can guide decisions on rental increases. Sometimes rents need to be reduced to reflect the market rent.
Managing tenants yourself can be quite time consuming, if you feel reluctant or lack knowledge and the confidence to talk to your tenants in person while knowing you could be getting more for your property, a good property manager can help obtain the right rent for your investment property.