It’s a tale as old as renting; a landlord is unsure as to whether they’re asking enough for their property. Do you think you’re getting undercut? How do you go about finding out whether you should ask for more? Most importantly, how do you actually raise the rent?
At Hutton & Hutton, we like to make sure you’re getting every cent of what your property is worth. However, we also understand it can be difficult to seek the amount you believe your property is worth without scaring off potential tenants. Therefore, we’ve comprised this handy guide to help you make sure you’re getting what you deserve.
(Credit: Pexels) It can be difficult to know when to ask for more rent
How can I assess how much my property is worth?
The first step to understanding how much rent to charge is getting a clear idea of your property’s market value. This can be difficult to gauge at any given time as the market is constantly changing and fluctuating.
Using a tried and tested 10-point evaluation method, Hutton & Hutton offer a free comprehensive market appraisal. We take into account location, improvements, maintenance, presentation, neighbourhood, market conditions, market trends, recent sales, supply vs. demand, and the ‘x-factor’ to accurately appraise your property.
From there we advise a fair rental price that is attractive to both you and potential tenants.
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When should I ask for more?
As a rule, it’s always a good idea to review your property’s rental rate every 6-12 months. This doesn’t mean you need to raise it every time; it’s just a good idea to make sure you’re charging the correct amount.
There are instances, however, where you are justified in negotiating higher rent from your tenants.
- If you’ve made improvements to the property
- If you’ve just repainted the property, installed air-conditioning, or had the bathroom renovated it may be worth bumping up the rent to reflect this.
- To keep up with the market
- If your property is located in an up and coming suburb, keep an eye on the going price of other rentals in the area. Make sure you’re not undercutting yourself and keep on top of the trends.
- The neighbourhood is improving
- Did a trend new bar just open up down the road? Perhaps the council just created a new bus line that stops right near your property? Or maybe you’ve caught wind of a Westfield’s that’s under development close by? All of these things are signs of neighbourhood improvement and they’re all valid reasons to bump up the rent.
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How should I ask for more?
You need to be delicate when asking for more rent, especially when you already have long-term tenants. There are strict laws surrounding rent increases, so it’s important to understand the correct methods.
In Queensland, you are only permitted to increase rent every six months, and it cannot be increased in a fixed-term lease unless clearly stipulated in the lease agreement. Even then landlords are required to give 60 days written notice of rent increase.
When deliberating how much to increase rent by, ensure you consider your tenants and how long they’ve lived in your property. If they have no plans to leave, it may be more beneficial for your long-term to hold off on increasing the rent too much. Alternatively, you could look at small incremental increases every 6-12 months to avoid scaring your tenants off with a large rise in rent.
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At the end of the day, your rental property is an investment. You should be getting exactly what it’s worth and not a dollar less. If you have concerns as to how much rent you’re currently charging, make sure you have a discussion with your agent.