Rental increase

Hi everyone,

I've been reading this forum and Somersoft for a long time now but never registered. So here's my first post.

I have a question. In my IP, the one year lease for the current tenants is about to end. During this year the rents in the area went up by between 80-100$ per week. While I'm happy with the tenants, I also don't want to miss out on lost potential rent. What would be a reasonable increase in rent? I'm happy to compromise.
Thank you

 

Personally, if you've done your research and you're sure $80 to $100 is market, then personally I think its reasonable to increase it to market.

Otherwise, if you want to compromise, its probably best to have a chat to your tenants about it.

 

Depends $100 rise on $200 is a lot, $1500 not so much. Didn't think there has been much rental growth in many places.

 

From early 500 to early 600. Lower North Shore 2 br unit

 

As per @twobobsworth how big a jump is the $100/wk as.a % on current rent? Tribunal would need good justification to increase above 5-10%

You also need to be comparing apples for apples ie similar properties not refurbished vs new or old vs new.

 

If you are certain that the market rent is up between $80-$100 per week then increase it to match the market. Personally, I would go for the higher amount ($100), put it forward to the tenant and see their response. This will also allow you room to negotiate should they come back to you with a lower figure.

Otherwise, you could raise it by $60 for the first six months and $40 for the next six months.

 

Nice, must be a strong in demand rental location. Are you comparing like for like and are the properties listed for 100 pw more actually renting quickly?
It's a good position to be in, I can't ever recall having increased the rent anywhere by more than $35 pw after a 12 month lease.

 

Sorry post disappeared. Check RTA Fact sheets as for existing tenants a rental increase cannot be deemed excessive...increasing rent significantly to align to current market conditions when advertising for new tenants with a vacant property is a different story

 

I'm usually in favour of increasing rent to at the top of the market range. But this is a huge increase.

 

Wowsers! That is a huge hike.. But like others have said that... If you can justify it.. it is all good.

 

Thank you for your replies everyone. I will speak with PM after the long weekend and update you.

 

If the rental market has strong growth, I would only allow a six month lease, that way it is much easier to stay on top of market rates. For instance, if you had already raised the rent by $40-50 six months ago, you wouldn't be having any problems now increasing it again, but to increase it by $80-100 in one hit seems like a large jump.

 

@skater makes good points. I try to time my leases to factor in moves in the market. I am offering shorter leases on my Sydney stuff now as rents are moving and ought to continue for a while.

Talk to your PM. If they're competent, they'll be able to confirm market rent and you can raise it accordingly with the knowledge that:

1. The tenants may not like a huge jump
2. If they wish to go elsewhere (comparable), they'll be paying the same as your proposed increase anyway