Rental increase’s

Hi all

How do your rentals increase in weekly rent over the years? Can you give any examples of how this has happened for you?

I ask because We recently have gone through replacing tenants and are in the middle of another change over

Each time, the property manager has not recommended a rental increase, they actually recommended a $10wk decrease. yet the new tenants themselves on the application have added $10 a week above asking (due to a tight rental market, multiple groups through) we had 12 groups through on 1 day and multiple applications

Is this not the time to be pushing for an increase?

 

Varies on the area, type of property, rental demand and state regulations.

In years gone by and not so long ago rents in some area's increased at far greater rates than state rental laws allowed increases ( 2 increases a year, at x%) so landlords have in some cases terminated tenants just so they could go back to market at a higher weekly rate.

I have reduced rent for a tenant once (by 10%), but am now thinking it's time they had an increase again, when the hols are over, aiming for Feb

I must have blinked and missed the so called Recession
The economy didn't tank, consumer confidence and spending is still powering along, plenty of people dragging kids into the world, life must be great in Aus

 

It was priced to rent. Prospective tennants were attracted and multiple expressions of interest. #winning. Price it wrong and it might still be sitting empty.

 

I always look around the same area and see what other people are asking for rent with similar homes, if you're way under I can't see the harm in asking for a $5 increase but not the best time increases.

 

I've always put ours up at least by $5 every renewal. In Brissie atm one of ours went up $85 week when we added an additional bedroom!. $10 is definitely reasonable for existing tenants and for new tenants in this market 20 - 30 isn't out of the question without having to do any upgrades to the property.

 

Your agent when re listing it should be presenting what is currently available in the market and what they are advertised for, and further give you a feel of what is achievable.

I believe from other posts you are listing in the north west of Brisbane? I have a property there re-let at the beginning of the year at what it was previously let for - if I was re-letting it again it would go for $10-20 per week higher as you have noted the market is super tight.

 

It absolutely depends on the market at the time. Rentals are a commodity and hence influenced by supply and demand. Currently some pockets of Sydney in some property types have a large amount of supply and limited demand hence there are decreases in rent from 12 months ago. From what I hear in regional areas and QLD there is a lot more demand which would warrant a rent increase.

 

How much have wages fallen, in real terms?

Is it Australian prosperity you are thinking of when you say we should raise rents?

Of course then there's the supply. Which has been built on the expectation of continued imported wealth in Sydney (oops...). But its a different story elsewhere.

If you are in a COVID restricted state where interstate FIFO has been knocked on the head then I think you should be an opportunist and go for an increase. That's what I'm doing in Perth. There are a lot of first home buyers finally entering the market while prices are low and subsidies are available. There's bugger all activity in the rest of the market there. A lot of people are looking to rent rather than buy, so vacancy is sub 1%.

Also, note that JobKeeper and JobSeeker begin to reduce now... I'm assuming its not a 1brm flat at that end of the market.

 

Codie, where is the suburb that you have question for? Check out the data.. house, bedrooms, bathroom, garage.
If it is within the 7km radius cbd of Brisbane. The current rental is super tight.
I know some house have their rental increase by $50 a week.

 

Surely it just depends on comparable rents? There’s no general rule you can just apply X% increase over Y time period.

 

I manage my managers, so I am an active landlord rather than a passive one.
They advise BUT I do my own analysis on the rents in the area, demand and supply at that time and instruct. Sometimes I ask for rental increase...so higher, sometimes I agree with them whether to extend same rent or lower, or extend even the longer rental terms.
Like managing a business you are your own CEO so the end decision should be yours.
My preference is for fixed term leases and longer terms just because I own many IPs so managing my cashflow becomes more important to me, sometimes less irrelevant that my rental is say under 10% of rentals, if you know what I mean....!

 

I'm pretty sure your property is in QLD. Based on what you've said, they under-priced it. That's not to say it definitely happened because we don't have all the details, but I think that's what happened. There's a lot of agents around at the moment who are totally failing to take advantage of the weirdly booming market.

 

Never rely on the PM. Some are just lazy & price under market to make their job easier. Check similar properties online, try to set your rent to market. Discuss with the PM why/why not. Remember investing is just like running a business.

 

Why would you only ask for a $5 increase? Set your rent to market.

 

Thanks for the answers all. Property is in Everton park, it’s by no means well under rented at $520 per week, it’s a fairly decent spec renovated 4 bed house. Comparable’s are around the $500-$520 per week however a few of those haven’t had renovations.

if you have tenants coming to you trying to pay more to secure it, and an agent saying decrease it. It doesn’t line up and I just wondered what the catalyst is for rents to go up over long periods of time.

If agents aren’t pushing for an increase at a time where things are good, they will never get one through when things are bad. You almost need to be testing the market for increases consistently

 

There's still rough water ahead, it was announced today they will drop job seeker another $100 which will have an effect on some homes and the smaller businesses. Better a happier tenant than an angry one that might try and default on payments. Plenty of time next year for a few rent hikes, it will be up to the individual of course.

Jobseeker payments to be cut from January 1

 

Methinks, it is time for you to get a new PM.

 

Sounds like it's been advertised at least $50/wk too cheap

 

Me too!

Seriously, if an average home is asking $520 per week, and yours is above average because it's had a reno and you are asking the same, then obviously people are going to be interested in yours, and makes sense that someone would offer an extra $10.

 

Supply and demand.

Yep, you do. Even if your PM is on the ball, it doesn't hurt to check.