randal_bond Posted July 4, 2015 Report Share Posted July 4, 2015 Hello, just by chance, by buying another property, already tenanted, we discovered that a usual rent on studio flats in Bristol is £500 pm and up. We currently rent out two studios, budget type, and I don't see how the tenants will pay, if we increase the rent. How do you rent your properties in a climate when rental prices have increased significantly, but salaries are still the same? Do you try to rent a bit below market price? How much would you increase the rent for long-term good tenants? We increased in half a year ago, to £425 pm, deliberately making it slightly cheaper than market price. Now, when the usual rent is £500, we are confused at what to do. And is it reasonable to increase rent half a year since previous increase? Thank you. Link to comment Share on other sites More sharing options...
Grampa Posted July 4, 2015 Report Share Posted July 4, 2015 Some landlords take the view of increasing the rental by the rate of inflation every 12 months which can be more acceptable to some tenants than a larger increase every 3-5 years. Also some tenancies have a yearly increase written into them. But there are many other factors that need to be considered when the landlord is contemplating a rental increase such as: 1 Is the property a easy property to rent out and would it generate a lot of interest if it became vacate? 2 How good are your present tenants and would it matter to you if they vacated over a rental increase? 3 Are the tenants on HB and how does the rent compare to the HB rates. 4 Have you considered speaking to a local letting agent for advise on achievable rental figures 5 How much works (maintenance/decorating) and cost would be involved if there is a change of tenants I find keep a rental increase between 15-25 quid pcm works for me but I also take the view of meeting in the middle or not increasing if it puts the tenancy at risk. We have a landlord who wants to increase the rent by £25 pcm on a 950pcm property but the tenants cant afford it (or say they cant) and will give notice if it increases which I think they will. The landlord wants to know how soon the property will re-rent at the higher amount if they move out. Well if you do the sums and assume it takes a month to find a new tenant and you then rent it out at the higher amount it will take nearly 4 years before you have recovered the lost month and you are no better off up to that point than keeping the original tenants. I always say if your tenants are good keep them and revisit the rent increase issue again in 6 or 12 months time. This works for me personally as a landlord and a agent. Other landlords may take another view. Link to comment Share on other sites More sharing options...
Melboy Posted July 4, 2015 Report Share Posted July 4, 2015 I have a long term tenant of nearly 9 years and I do not raise the rent that often in fact only twice in 9 years. I want to keep him as he is absolutely no trouble, keeps the place spick and span and pays his rent on time with no trouble. No 'void periods' to worry about and very little maintenance issues as well. I'm happy with this arrangement as it suits me so there is one answer to your question randal_bond. On the other hand I have a garden flat which has a high turnover of tenants who on average stay about 12 months or a bit less. Never a problem to rent out and always a queue of tenant's wanting it but it is time consuming with preparation virtually every year and legal paperwork etc. so I do watch the rental return on that, in fact I have jacked it up by £25pcm on change of tenant this past week but it made no difference to the length of the queue of people wanting it. It is still a competative price for a garden flat in my location. If you raise the rents by too much you will lose your tenant's...... it as simple as that, so carry out any rent increase in small steps. Link to comment Share on other sites More sharing options...
Richlist Posted July 4, 2015 Report Share Posted July 4, 2015 1. I give all my long term tenants a small discount on market rents of around £25-£50 pcm. 2. I sometimes return part or all of the deposit. After 5,10,15 years of letting to the same people you kinda get to know who you can trust. 3. Long term tenants get lots of other advantages for staying :-a) Free use of my property in Spain. A virtual 24/7 service response to problems. c) Always a small thank you gift if they are particularly helpfully.....just a bottle of wine or some chocs. d) A Christmas gift. e) Flexibilty with notice periods......I never insist on notice ending on a rent day. f) I pay tenants a £50 finders fee if they introduce a suitable tenant that goes on to rent one of my places. etc etc Link to comment Share on other sites More sharing options...
Melboy Posted July 5, 2015 Report Share Posted July 5, 2015 That is what I do for my good tenant's as well RL in your list above except the free use of a property in Spain. I guess it is how you handle your letting business and treat your tenant's that counts and I would imagine a lot of the new entry BTL landlord's just don't see this side of letting property and are only concerned with the percentage they getting back in rent money on their investment. Link to comment Share on other sites More sharing options...
randal_bond Posted July 5, 2015 Author Report Share Posted July 5, 2015 Thank you for kindly sharing with me. I already do some of RichList's tips. "2. I sometimes return part or all of the deposit." Not sure about that. We so far have ALWAYS returned the whole amount of deposit, except for one rogue T, who we battled it out with DPS, and it went in our favour. Link to comment Share on other sites More sharing options...
randal_bond Posted July 5, 2015 Author Report Share Posted July 5, 2015 Each time I click on "My Settings", it goes to Zend Optimizer not installed Not sure how I can change my password now Is it some new thing? Do I really need to install it? Link to comment Share on other sites More sharing options...
Richlist Posted July 5, 2015 Report Share Posted July 5, 2015 Just to clarify my point no 2..... I sometimes return part or all of my long term tenants deposit whilst the tenancy is still running. Sometimes I offer to return their deposit at the same time as I impose a small rent rise or other actions. I am not referring to deposit returns at the end of the tenancy. Link to comment Share on other sites More sharing options...
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