Rent Increase

[adonaghy]

I have two properties in Glasgow rented out to nice tenants and seek some advice about rent increases. One couple have rented for 1 year and the other 18 months. Rents are modest given that they are houses, rather than flats so should have a slight premium. Tenants seem happy but I would like to increase rents by 1 to 2 per cent annually. I read some landlords don’t raise rents when all going well as this can tip tenants towards leaving. Any advice please. Do I do nothing and let rent value erode or make modest increases annually?

[Richlist]

* I try to keep my rents up to date with the general increases in market rents for similar property.

* If i have a particularly good tenant I'm never in any rush to raise rents and risk losing them.....bad or mediocre tenants get regular increases.

* I only increase rents annually.

* I try to keep increases to around 5%. 

* I always provide lots of notice.....at least 2 calender months.

* Longer term tenants get a discount (around £50 pcm) after 4 years.

* In England there is a form.....I believe it's Housing Act 1988 section 6(2).....that can be completed and I usually attach this to a letter addressed to the tenant informing them of the increase.

* I always point out the following........that market rents have risen, i try to keep increases as small & infrequent as possible, i also try to provide a small discount on normal market rents, i feel the new rent level is still competitive and quote those other rent levels. I remind them that they need to contact their bank and change their monthly standing order.

* Never had any problems following this process.

* Scotland has different rules to England......suggest you talk to Scottish people for details.

[adonaghy]

Thanks RL, very helpful. I’ve relevant documents for Scotland I’ve obtained from Shelter. Keen to keep on good terms with current tenants so will take this on board

[Grampa]

Just remember landlords who dont increase for a number of years then want a largish increase will cause problems for themselves as the tenants wont like it  and may leave or cause bad feeling which isn't good for landlord tenant relations. Small and regularly is the way to go.  

[adonaghy]

Hi, yes I’ve had experience of this. I reduced rent to previous tenant by £50 pcm citing hard times and when I asked for increase a few years later- she gave notice and bought herself a property. I live and learn. 

[Melboy]

Almost everything that has been said above.

I increase my rents by a modest amount each year normally around £4-£5 a week but there again my monthly rents are much lower then local rental market rents and I do point that out. I have never had any adverse comments to my rent rises and everyone seems happy with what they are paying.

I made the mistake a few years back of not raising the rent on a property for 5 years because I had a very good tenant but that was a big mistake. I have slowly increased the rent on the same tenant for 6 years now but in reality the total rent payable is well below what I should be obtaining.  Lesson learned.

So for me increase rents by a modest amount each year, don't leave it for too long.

[adonaghy]

Thanks all, I’m going to make a modest increase using pointers provided to inform them of the value for money they enjoy

[Notnow]

Just don't be greedy, be honest with the tenant and yourself, I normally only raise the rent upon a property becoming vacant, the problem I have experienced is that all my tenants have been in  the flats for a long time,  I have just recenty had to raise the rent while they are occupied for the first time in 10 years, the problem with doing it this way is that I can't raise the rent too much as it would be a shock, so I am now going to do it annually in small increments, remember that you do have to keep competitive, don't give the tenant a reason to move based simply on the rental cost, keep the rent low and keep the property filled, there is a lot to be said for long term occupancy, it makes life easier.