If you increase rent you will get more out of your investment property and keep you at market price, but is it the best move? A good tenant is a good tenant. Somebody who pays rent on time every time, keeps your property well maintained on their end and is not a nuisance, well that’s the way up between a few extra dollars a week and potentially losing them.
Now, you must get the best out of your investment property. It is a business and your livelihood, your future. There are tactful ways in doing so and instead of demanding, you should enter a calm negotiation. Instead of trying to enforce market value, work towards small increases that keep all parties happy.
If you go in a little heavy from the beginning, both with price and demands, then you will set yourself up to lose your current tenant. This leads to extra letting fees from your agent, possible renegotiation on your management fees and approving a new tenant you don’t know anything about. The fee changes alone already make a dent in your new price but if you choose the wrong tenant, you could end up being months out of rent.
Before you make any decisions to increase rent, you should speak with your agent. You must have all the knowledge of current rental market in both activity and price. It’s not unusual to see a rent increase force a tenant out of the property, but the activity in the market is slow, so a landlord ends up renting the property for the same amount or sometimes less just to get an income. Once again, you pay fees and spend months monitoring your new tenant.
Be smart, negotiate and take your agents advice. Don’t demand anything but come to a compromise and set yourself up for future increases. A good tenant is worth more than an extra $10 a week, so don’t just think in dollars and cents. Make the right choices and reap the benefits for the long term.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.