Rents - Melb 2017

What are people doing by way of rent this year?
Are you leaving it as is or increasing and if so by how much?

I have served the tenant with a 2% increase... effective next renewal (April 1) if they want to renew.
This is off the back of no increase last year. I feel it is fair... they do not.

 

Unless its a commercial lease and the increase is specified in the lease - I don't get why you would calculate any increase at 2%, or why "no increase last year" is of primary relevance.

Surely its just market rents - your current rent could be under, over or about right already.

Plus how the tenants feel about it probably is an important factor depending on your exact leasing situation.

Have you had a look at what comparables are renting for?

 

Assuming the rent is $500 a week and you've increased it 2% that's $10 a week extra. Doesn't seem unreasonable.

 

Yeah that's what I thought... $582 --> $595.

 

Generally always increase the rent by $5 or $10. If the current market comparables do not support the new rent and the tenant chose to contest it at tribunal (VCAT), then the tribunal may over-rule the increase.

 

No it's residential. The tenant has had 20 months rental with no increase. I am wanting feedback from members on lease renewals coming up and their plans from a rent perspective.

Agree how tenants feel is important.

 

I always ask my mangers to make sure I'm getting market rent. This sometimes means no change, small increase. Usually decreases happen when the property is vacant.

The only time I automatically increase the rent is if the tenants want to go month to month, then the rent goes up as I much prefer 12 month leases.

 

Thanks for your feedback guys - the manager assures me the 2% increase is still positioning the property below market rent. So the tenant can accept or move.
Cheers

 

Would depend on how good the tenant is.

Also, don't forget that if your tenants move, and you are lucky enough to re-let the property after just one week, it will take 48 1/2 weeks to get yourself to the same position as if you just left the rent as it currently is.

After a 12 month lease you would be $45 in front. Sometimes it's not worth the grief.

 

Understand.
Tenant has accepted rent increase.
Like I said it's still below market rent but don't want to up it too aggressively.

 

What are the comparable properties doing ?

 

I've increased mine by $10 pw up to $440 after 2 yrs of no increase. It's still under market by $10-$15 due to good tenants.

 

Most of our rents go up by 4% automatically per annum. Although it's not an easy market - rents are just way too high and people are struggling, whether it's families or businesses - family had two buildings that've been vacant for more than 12 months in the CBD. One just got leased out, the other is still sitting vacant. This is commercial.

Some of my resi have seen stagnant rents thanks to oversupply of apartments.

 

I never do a % for resi, that's crazy. Better to look at comps and charge similar or $10pw less if good tenants. One trick I do is always give the tenants a choice by offering a 6 mth lease at say $320pw or 12 mth lease at $310pw, depending which way I want to steer them.

 

Tenants can have a tendency to negotiate the rental increase just because they don't have anything to lose. This is why landlords need to know what rent they should be charging based on their own research of comparable rents in the area and not just relying on their agent for a figure. Then you can stay firm, knowing for yourself you're charging the right amount.

My agent is excellent but errs too much on the side of caution by leaving rents the same without regular increases. I have a couple of property's where there have been no increases for a few years. After doing my own research which involved going to opens for rents in the areas, they are way too low. Agent would have been better to put them up $5 to $10 each year. Now I'm faced with putting the rents up $40 week (still under market) and risk losing the tenants.

 

One of my tenants haven't let the maintenance guy in for months.
They want a new lease and a 'below market' rent increase.
Any thoughts or suggestions?

 

Have rents fallen in the area? Ask them why you should drop the rent after checking comparables and emailing them some links. Do my trick above and offer them 6 or 12 mths at different amounts.

 

Dear Skyfall,
rets have gone through the roof..
I like your idea of six months at x and 12 months at y..
thx