Rent Increases – How To Increase The Rent Without Losing Your Tenants?

Written by Marina George, Founder of Renthub

For some owners negotiating a rent increase with their tenant is about as comfortable as having a tooth pulled!

It’s completely understandable that you might be really uncomfortable the first time you are wanting to give your tenants a rent increase. You may be concerned that they will give notice or present you with a list of maintenance items to attend to or that you might offend them. However remember owning an investment property is a business and all prudent businesses have to look at both expenses and income on a regular basis. Having said that it’s your tenants that pay your mortgage/provide income so there is also the human element to consider.

So when it’s time to revisit the rent that you are charging consider these things

✔Increase the rent a small amount at each lease renewal

Most tenants expect a slight rent increase at renewal time of, say, $10 to $20 per week. But if you spring a $50 or more increase on them after not having increased the rent for some time you’ll likely get some negative feedback or even worse could potentially loose great tenants. A small increase each year rather than a large one every few years will help your tenant to absorb the rent increase and be in a better position to manage the increase financially.

If you have an excellent tenant whom you are trying to convince to renew, you could think about increasing the rent by a tiny amount (say $5 to $10) if they agree to renew their tenancy for another year. An excellent tenant is worth far more than any rent increase. And after all, you can always make up the difference by raising the rent when they move out.

✔Take away the shock – give your tenants plenty of warning about the upcoming rent increase

Although the legal requirement is to let your tenant know in writing 60 days prior to the rent increasing of your intention to increase the rent, sending a rent increase letter with as much notice as possible will go a long way towards reducing conflict with your tenant about the rent increase.

If they decide to give notice this will then give you plenty of time to start advertising and showing the property without having a vacancy period.

In the letter that you send state:

→ how much the rent is increasing by

→ the date the increased rent takes effect from

If you have a fixed-term lease, you could include or attach a tenancy renewal letter. Ask that your tenant read the renewal letter, sign it, and send it back to you. Be sure to keep a copy of this notice for your records.

Example of a rent increase letter for a fixed term tenancy


Tenants name and address

Re: 60 day rent increase notice (address of property)

Dear tenant

We have recently completed a rent review at (address of property).

We have looked at a number of different factors to determine the rent and also took into account that we appreciate having you as tenants.

This notice is to let you know that we are giving you 60 days notice that as from [date of increase rent], the weekly rent for the property you are renting shall be increased to $____ per week. This is a change from your present rent of $____ per week.

This increase will also require an extra ($xxx) to be paid to bring your bond in alignment with the increased rent. Enclosed is a bond form which I’d appreciate you signing and returning.

If you have any questions, please do not hesitate to contact me at [phone number].


(your name and signature)

What should I do if my tenant complains about the rent increase?

Generally speaking, if your property has been maintained well, you respond quickly to any maintenance issues and communicate well with your tenant you will find that although no tenant is happy about paying more they will be more accepting and understanding that at times it’s necessary to increase rent.

If they do express concerns be prepared to give examples of what other similar properties are renting for in the area, mention any improvements you have made to the property and remind them that a small increase in rent will enable you to keep the property maintained and benefit them.

How much should I increase the rent by? Click here for tips to decide what the increased rent should be.

Need help with your rental property?

Renthub offers flexible options for self-managing owners and a full-service option for owners that want to be totally hands off. 

Click here or give us a call on 09 630 2655 to find out more.

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