When you’re a landlord you want to be sure that you’re getting the best return possible on your property purchase, and sometimes to achieve that you’ll need to increase the rent that your tenants are paying. Charging far above the market rate, however, won’t do you any favours and may even result in you losing your tenant – and your monthly income from the property! An overly ambitious rental cost also increases the chance of a long-term vacancy and in the world of property investing, there’s little that sounds worse – if your property’s been vacant for a long time you’ll have a much harder time letting it out, as it screams to any prospective tenant that there must be something wrong. To keep true to the market and ensure you don’t lose quality tenants, it is essential you follow these simple steps.
Regular Rent Review
The best way keep rental increases sustainable is to always know how your rent compares to the market, and review the rent accordingly to match those levels. That way, when increases have to happen they’re small – rather than infrequent reviews where the increase is so high that it shocks the tenant and they move out. If you’re a first time landlord it might feel daunting to increase the rent, fearing that your tenant may not like it and move out. But in reality as long as you stick to your guns and the increase is reasonable you should have no problems with your tenant. It’s only when landlords demand more than they should according to the market that tenants get disgruntled. If you haven’t got a tenant yet and are unsure where to set the rent to start with, then take advice from an agent or attend open viewings to gauge your property compared to other properties in the area – this should give you a ballpark figure. You should also check out what the average rents are in the region, and how it compares to the rest of the country – check out the infographic below.
If your property is run down and maintenance issues are being ignored, then how can you expect to increase rent? Again this is all about reasonability; if your property is kept in great condition then you can reasonably charge a more rent, it’s a no-brainer! This is something you can take care of at every stage of renting your property. Before you put the property on the market, address and maintenance issues such as plumbing or damp, and decorate the place in neutral but warm tones – that way a prospective tenant will be able to imagine putting their own personal stamp on the place. You should also consider installing a new bathroom, kitchen, or both. These more than any other are the areas in which a tenant really wants to see cleanliness and functionality, so if they’re looking a bit run down replace them – you’ll get the return on the investment by being able to charge a higher rent. Avoid cheap bathroom fittings though – they’re a false economy and will need replacing much sooner than properly installed quality fittings.