Rent Appraisal Time

[Carryon Regardless]

It's the annual rent increase time. So I'm going to be considered evil and stealing food from my tenants mouths.

I look at Right Move and other sites to see what is going on locally. Sometimes it's difficult to see enough examples to gain fair comparisons, but those I have found are flippin' shocking. I pitch below local market rents but in many cases I've fallen far behind with my low rents. But try explaining that to tenants that just see "I want more of your dosh".

In a periodic we are able to increase rents annually, unless a tenant agrees otherwise. So a bit limiting in that I can't split the increase across 2 occasions to make it more palatable.

We should only increase within the range of local rents. That's dependant on reasonable comparisons of course.

I read Wales has increased by 7.7% this last year, the North West by 10.1%. I'm not increasing at those levels, but one will see a rise of 5.9% for a respectable 3 bed semi, that's quite a jump on a rent already approaching £700pcm (I know chicken feed compared to the south, but everything is relative (but not your tenants)).

Where I might feel concern is if a tenant objects and this goes to a fair rent tribunal. Whilst I should be able to demonstrate a fair increase it may be against a lawyer (Shelter funded) at a hearing. That leaves me / us on the back foot.

Should we be beaten up in the court we might expect costs to be claimed against us, I certainly wouldn't expect to see any recompense should I / we show the increase to be just.

Any thoughts?

[Richlist]

I also set my rents slightly below the average in order to attract tenants. I always increase rents annually so it's never a very large increase. I've never had any problem increasing rents but this year is different. I appreciate that people are being faced with increases in gas/electric, council tax, NI, petrol/diesel, food and virtually everything else so I recognise that perhaps this year needs to be handled a little differently as some people will be very short of spare money.

Those tenants who look like they will stay another year or more will get a small increase. Those who are likely to leave in a few months wont......because I can increase the rents for the new tenants that will replace them.

Really long term tenants are handled very differently, especially ones I don't want to loose. In the past I have increased their rents but compensated in other ways eg.......refunded some of their deposit or offered them a free week in my place in Spain.

[Melboy]

I have a tenant who has been with me for 17 years. I know it is unbelievable.  He is an absolute model tenant and keeps the property in excellent condition and is no bother to me so it is always difficult to present him with a rent rise but this week he has to have one but I do keep it low and his rent is well under the rate I should be receiving.

Horses for courses I guess and in this particular instance I wouldn't do it any other way.

[bil8999]

I have a number of tenants who have never had a rent increase, i now wish i had increased the rent by a small amount each year, we tend to leave the increase until the property is re let. My mistake.

[Grampa]

Yearly rent increases are so important even if they are relatively small. The tenants come to expect them and you don't find yourselves in a situation where you have to justify yourself to the tenant.

Remember a high % of  tenants conveniently forget if they haven't had an increase for the last 5 years and then feel aggrieved because you now have given them a increase. They are then likely to become slightly belligerent and put numerous requests for repairs and upgrades which may not be necessary. (not that I'm suggesting you dont do repairs etc as normal)

Even if you do have a model tenant you can still show them favour by giving a reduced increase so the rent is under market value but they will then come to expect it each year and there is nothing to stop you explaining that the market rent should be £xxx so they know they are getting a good deal.  

  

[Grampa]

15 hours ago, Richlist said:

I also set my rents slightly below the average in order to attract tenants. I always increase rents annually so it's never a very large increase.

I agree, and this is my preferred strategy for my own personal properties and have very small turnover of tenants. I see the opposite with landlords who are more aggressive with their rent demands and turnover of tenants generally can be higher.