Landlords - An alternative to Raising Rents...
18th January 2011
No doubt you have seen in the press that rental prices continue to increase (in most places) and how it is a boom time for most landlords as interest rates remain low.
When is the best time to increase rents? No doubt in my mind it should only be done when you are re-letting a property and not during an existing tenancy.
Regardless of how well you get on with a tenant, a rent increase in the vast majority never goes down well. You certainly won't get your tenant giving you a call saying 'Thanks for putting up the rent.' If you do, let me know because you'll be the first :-).
Instead, I think that landlords will benefit more by keeping tenants in the property longer thus minimising void periods. Let's say for example you have a tenant paying £500 per month and has been in your property for 12 months on this rate.
If the market average is now £550 then you are losing £50 per month potentially. So if you tell your tenant that you will be bringing the rent in line with the current market, it is a big 10% increase and could encourage them to start looking for alternative accommodation.
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