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SHOULD YOU INCREASE THE RENT?

SHOULD YOU INCREASE THE RENT?

At a time when landlords are having to fork out for extra stamp duty and where there are planned changes to reduce the amount tax relief that can be claimed it seems prudent to make sure rent levels stay at the market rate to cover increasing costs.

However, do you really want to scare off a good long term tenant by asking for a rent increase? Probably not.

This said, there can be a balance struck between keeping a good tenant and also making sure your property keeps up with market rates and stays profitable. We advise the following to try and achieve this stability:

-          Keep increases small and regular. A tenant is not likely to leave because of a £25 per month increase once a year but is if you leave it 2-3 years and suddenly ask for £100 per month increase. This is easily achieved at renewal stage by drawing up a tenancy agreement with the new agreed rent within it or you can also use a section 13 notice if the tenancy is in a periodic status.

-          Keep on top of repairs- a happy tenant with a well maintained property is unlikely to want to leave. You can also offer a sweetener for rent increases e.g. replace that old washing machine that’s been there for years- you will probably get a machine with 2-3 years’ warranty and this would be small price to pay for keeping a tenant happy with a necessary rent increase.

-          Give a generous notice period- If you are planning to renew the tenancy for a fixed term then give 2-3 months’ notice of the rent increase, don’t spring it on the tenants a couple of weeks before the current end date. Give tenants enough time to accept and plan for the increase and to budget accordingly.

-          Don’t be greedy- Listen to the advice of experienced local professionals and be fair to your tenants. Remember- your tenants could appeal a rent increase.

-          Be prepared to justify the increase in rent- This will be job of your agent if you use one but they may ask for comparable properties locally- make sure you keep up to date with local property values.

If you would like to discuss reviewing and increasing the rent for your property then please contact Laura Fiddes-Baron or Thomas Miller on 01214457410 or email lettings@oulsnamlettings.net

At a time when landlords are having to fork out for extra stamp duty and where there are planned changes to reduce the amount tax relief that can be claimed it seems prudent to make sure rent levels stay at the market rate to cover increasing costs.

However, do you really want to scare of a good long term tenant by asking for a rent increase? Probably not.

This said, there can be a balance struck between keeping a good tenant and also making sure your property keeps up with market rates and stays profitable. We advise the following to try and achieve this stability:

-          Keep increases small and regular. A tenant is not likely to leave because of a £25 per month increase once a year but is if you leave it 2-3 years and suddenly ask for £100 per month increase. This is easily achieved at renewal stage by drawing up a tenancy agreement with the new agreed rent within it or you can also use a section 13 notice if the tenancy is in a periodic status.

-          Keep on top of repairs- a happy tenant with a well maintained property is unlikely to want to leave. You can also offer a sweetener for rent increases e.g. replace that old washing machine that’s been there for years- you will probably get a machine with 2-3 years’ warranty and this would be small price to pay for keeping a tenant happy with a necessary rent increase.

-          Give a generous notice period- If you are planning to renew the tenancy for a fixed term then give 2-3 months’ notice of the rent increase, don’t spring it on the tenants a couple of weeks before the current end date. Give tenants enough time to accept and plan for the increase and to budget accordingly.

-          Don’t be greedy- Listen to the advice of experienced local professionals and be fair to your tenants. Remember- your tenants could appeal a rent increase.

-          Be prepared to justify the increase in rent- This will be job of your agent if you use one but they may ask for comparable properties locally- make sure you keep up to date with local property values.

If you would like to discuss reviewing and increasing the rent for your property then please contact Laura Fiddes-Baron or Thomas Miller on 01214457410 or email lettings@oulsnamlettings.net

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