We get it, some of you property owners out there, you’re all about heart and worried about increasing your tenant’s rent. And I love that, it’s admirable.
But here’s the thing, your property is an investment, and you’ve got to maximise the financial potential, no excuses.
So consider these things to safeguard the value of your investment:
- Maximising Investment Performance: Your property is an investment, so as with any investment it’s critical that it performs optimally. This means aligning the rent with market rates to maximise your returns.
- Market Rent Awareness: Staying in tune with market rents is essential. Market rent is what renters can reasonably expect to pay. Renthub ensure that when we review your tenant’s rent, it’s in line with similar properties in the area, neither too high nor too low.
When looking to see what market rent for your property would be have a look on Trade Me and see what similar properties are renting for in your area and also go to Market rent » Tenancy Services which will show properties where bonds have been lodged in the last six months and give you an idea of lower, median and higher quartile rents. - Affordability and Property Maintenance: Raising rent annually enhances your ability to maintain and upgrade the property. Well-maintained properties not only increase in value but also improve your tenant’s quality of life, often leading to longer tenancies.
- Preventing Deferred Maintenance Costs: Regular rent reviews help you stay on top of maintenance. This proactive approach saves you from unnecessary and excessive costs resulting from delaying repairs longer than you should.
- Gradual Adjustment for Tenants: Annual rent reviews enable tenants to adapt to market changes gradually and plan their budgets accordingly. Sudden, significant increases can cause financial strain and tenant turnover.
Recently I heard of an instance where an owner hadn’t increased the rent for 3 years and then sent the tenants a rent increase of $120 per week. Yes he increased the rent to market rent and was justified in doing so however for the tenants this was incredibly stressful for them as every $10 to $20 per week is a lot of money for them let alone having to find that much. - Preventing Disputes and Complaints: Regular rent reviews prevent disputes and complaints from tenants. If the rent increase is large it’s not uncommon for renters to look around the property they are renting and bring up issues they may have lived with for a while but will now resent because of the large rent increase letter they have just received.
- Compliance and Communication: Ensure you comply with legal requirements and communicate with tenants appropriately. Providing at least the required 60 days’ written notice for rent increases and be prepared for your tenants to come back with questions.
In a nutshell, being kind to your tenants is a must, but don’t forget the absolute importance of managing your property like a savvy investment. Renthub’s got your back in helping you find that sweet spot where you can keep the landlord-tenant relationship positive while maximising your property’s financial return.
Need help with managing tenants and rent?
Give us a call on 096302655 or by filling out our contact form Contact Us – Renthub – lettings agent in Auckland
