Property Investment Tips: When should you raise the rent?

By the resi financial blog team, 24 April 2015

Property Investment Tips: When should you raise the rent?

Think of rent like the lifeblood of your investment property: It's there to support your long-term goals and can give you the extra funds needed to maintain the property in the mean time. However, one of the biggest mistakes a landlord can make is to let their rents stagnate. It can be a touchy subject with tenants, but reviewing your set rent regularly can stop your from losing money on your property. But how do you go about this? Here are some tips to help you make the right decision. 

Don't forget about terms and conditions

There is a strict set of rules governing how often you can put up rent. Each state has it's own laws, so you should consult with your property manager to get the lay of the land before going ahead with any changes. Remember: Rental properties are a bit like a team sport. While the coach is in control of the game, the players have a say in the conditions they perform under. You may need to negotiate the price with your lessees, and they have the ability to challenge you if they believe the rise is excessive.

The details differ between lease types but, in general, you'll need to provide your tenants with written notice well in advance of a rent increase, justifying the increase - and they'll need to agree to the conditions. Forgetting this point can land you in hot water. 

Build a good relationship

To reduce the risk of your tenants up and leaving when you have decided to put up the rental price, it's worth building a reliable relationship with them over the course of their lease. This means carrying out regular repairs and keeping the property in good nick, as well as responding promptly to their queries. Similarly, having a good property manager on your side will help the process - they can take care of the day-to-day activities and advise you when it's a suitable time to increase the rent. 

Rent is just one aspect of the property investment journey. For the first step in the process, speak to the loan specialists at resi about the assortment of property investment loans available. 

Categories: Property Investment