Raising rent in the middle of 12 month tenancy

Discussion in 'Property Management' started by James Bond, 7th Mar, 2017.

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  1. James Bond

    James Bond Well-Known Member

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    Hi

    One of my tenants has requested I install aircon in the house.

    I'm happy to do this, but I feel the rent should go up as they will be renting an improved property.

    Can I put the rent up mid-12 month tenancy under these circumstances? The house is in VIC.

    Thanks for any advice.
     
    James Bond, 7th Mar, 2017
    #1
  2. DaveM

    DaveM Well-Known Member

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    $1800 for an AC, at 4.5% IO drawn from a loan split/LOC is $81 pa in additional interest. Is that worth it to keep good tenants?
     
    DaveM, 7th Mar, 2017
    #2
    wylie likes this.
  3. D.T.

    D.T. Specialist Property Manager Business Member

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    D.T., 7th Mar, 2017
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  4. wylie

    wylie Moderator Staff Member

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    We've been asked about this by tenants, who decide they don't want to pay anything extra. If that happens, we still consider installing and then increasing the rent when we renew.

    But as DaveM says, if they are good tenants, and the cost is minimal, I'd install to KEEP them rather than have them look around for what else is available when the lease finishes.

    But I did just ask and get an extra $10 rental from a sitting tenant. We both agreed to sign a new lease at the new price.

    I weigh this type of request up on the merits of each tenancy. We have great tenants, so I try to keep them happy, and keep them wanting to rent our places.
     
    wylie, 7th Mar, 2017
    #4
    Marg4000 likes this.
  5. 8650

    8650 Well-Known Member

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    I agree with Wylie if you have good tenants that look after the property and pay rent on time then keep them happy it is better than to lose them.

    But I would negotiate with the tenant to mutually end current lease agreement with rent increase for the installation and supply of the air-conditioner. There has to be give and take in this instance.
     
    8650, 8th Mar, 2017
    #5
  6. Xenia

    Xenia Well-Known Member

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    All rent increases need to be justified by comparative rentals. If other similar properties are renting for $10 per week more due to air conditioning, then you have a precidence that allows you to increase rent and be challenged by tenants.

    Good luck c
     
    Xenia, 8th Mar, 2017
    #6
  7. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    It is obviously always better to keep good tenants than to lose them, but this is not a factor when deciding on your business returns I.e. Whether to raise rent or not for various reasons.

    Your property was rented for a price without air conditioning and they accepted that. If you install air conditioning there has to be a return on that investment relative to your property and the surrounding market. If the market has gone down (rents decreased) for similar properties with air cond, then that might be a case to keep the rent the same. If properties with air cond surrounding yours command a higher rent, then charge the higher rent. They are not going to move for a $10 a week rent rise because they wanted air con and you provided it. Many landlords would just say no, period.

    Remember, you are providing them a service for their rent in the form of accommodation and fulfilling your duties based on a market price.
     
    MyPropertyPro, 8th Mar, 2017
    #7
  8. James Bond

    James Bond Well-Known Member

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    Lots to think about. Thank you. At least it is the end of summer now so I have a few months to think about it.
     
    James Bond, 8th Mar, 2017
    #8