Structuring a rent increase

With the recent laws limiting rent rises once per 12 months, I'm noticing tenants are ignoring my fixed term offers and just going month to month.

Logically then, I should give them one rate for 12 months and a slightly higher rate for going month to month.

Does anyone do this? How do you phrase the rent rise notice to effect this?

 

Don't overcomplicate it. Use the template from Fair Trading end of story, no justification required.

 

does the template allow for giving 2 rates for 2 terms?

 

Why allow month to month at all?

 

Read the template

How do you have two terms?

 

When you advise the tenants of a rent increase in writing, just give them the option of $x per week on periodic or discount of $x per week if they sign a fixed term agreement by x date.

 

Send your new lease, along with a notice to leave. Let them choose which 1 that want to accept.

 

This is what has always been recommended to me by my PM's for my QLD properties. I am not sure why it would be illegal. You have come to the end of the current agreement, and as such have an obligation to give certain notice that you do not wish it to automatically roll over into a periodic agreement. You also offer a new lease agreement if the tenant wishes to continue on.

 

Its not illegal, but I've always felt that it was harsh and doesn't leave much room for discussion or negotiation. We always want to try and work with the tenant where possible.

 

Thanks Mel - this sounds like the way to go.

What about a 3rd option - notice to vacate - just to start the timer in case they don't want to accept options 1 or 2 - is that necessary?

 

It wouldn't make much sense to send a notice to vacate if you're ok for them to stay on a periodic tenancy. So the default would be Option 1, alternatively they can go with Option 2 if they sign it prior to the expiry of the current fixed period.

 

OP doesn’t mention which state referring to, In Vic there is no ability for no cause evictions after the 1st fixed period so this would be against legislation.

 

Very tempting strategy but the quid pro quo is when the rental market eventually turns, they may get nasty on you. As much as I'd like them to be locked into a fixed agreement, I'd be content enough with top dollar rent on a month by month as well as them paying their rent on time.

 

Why does it matter if they're on a fixed term lease or month to month? If they take a fixed term lease you've got 12 months of rental income guaranteed. If they take month to month, in the current market you've probably still got 12 months. Worse case is they decide to move out giving you the option to increase the rent for the next tenant.

Playing games with the tenants, threatening eviction of they don't sign, just makes for bad relationships. There's all sorts of passive aggressive things they can do to make the landlords life miserable if they want to. Best just to leave them alone, let them enjoy living there.

Also ask your property manager what is the charge for a lease renewal?

 

I'd tread very carefully, but its not entirely something I'd rule out.

I'm a tenant that prefers periodic tenancies so Ill usually do the reserve of what you wanting to do and offer more for a periodic (cough less for a fixed term).

It comes down to how you frame it as it to the reception you will get.

 

Is the rent payable weekly, fortnightly or monthly with this tenancy?

 

Big difference depending on the state legislation.

Agree no change in Vic Peter, however makes a big difference in Qld due to differences in eviction options (ie no grounds) at end of fixed term v periodic.
Changed with rental reforms approx 2?? years ago.

 

Is there any benefit of a renewing lease on fixed term given the amount of compensation for tenants to break a fixed lease makes it no longer worthwhile?