If the tenants are in a lease at present you cannot increase the rent unless there is a clause to that effect in the lease.
My accountant tells me that all the landlords he deals with who bought just before the bust are just waiting to get out of the Biz.
There are two types of private residential tenancy a fixed term and a part four (everything which isn't fixed term).
A part four is subject to an annual rent review.
Debating a rent increase myself. Our situation is that tenants are in the property 4.5 years, paying approximately 500 a month under what a similar property has gone for in the area recently. I don't want to hit them with that size of a rise but feel that we should be getting closer to the market rent. What would be a fair increase given that they are currently paying less than a lot of 2-bed apts are going for (property is 3 bed + attic, fully renovated in 2007)? We are paying an extra 200 on the rent to meet the mortgage.
Thanks for the responses.
We have left if as the status quo as they have been good tenants, always pay on time and have been no trouble. We don't live close by which makes it more difficult to sort issues out (reluctant landlords) and I suppose having good tenants has made things a lot easier for us. I do feel that this peace of mind is worth a discount. The way I've looked at it to date is that the net value of a rent increase may not be worth losing the tenants over, but now that the difference is sizeable it's probably time to take action.
I think I may go with odyssey's suggestion of 250pm more; I feel that's fair to both sides.
Why should they mind the property as if it was their own? What's in it for them?
At the end of the day it will be yours not theirs after they pay off your mortgage.
If you want them to take an interest in a property, you must engage their self-interest.
If you are having to replace items then come rent review time bring that to the table, if you are not perhaps you should consider that when assessing your rental income against "market" rates.
It's not about what's in it for them, it's about respect.
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