Ben owns a rental property in Bedford.
Ben hasn’t raised the rent for years, partly because he’s been too busy to action an increase, partly to avoid the awkward conversation with his tenant.
Don’t bury your head like Ben…
Do engage your agent.
Your agent does this day in, day out. They know the market, your tenant, and they’ve got experience negotiating rent increases, whether a simple or challenging situation. Take advantage of that—it’s part of what you’re paying for. You may have a good relationship with your tenant, which is great, but emotional ties can make raising their rent tricky. It’s best to let your agent take over.
Do your research.
Although your agent will be able to tell you what the market’s saying and what price your property should be rented out at, it doesn’t hurt to do your own research. Look at Rightmove, etc. for what similar homes are going for. You’ll soon see if a rent increase on your own is long overdue.
Do make sure you’re up on maintenance.
A possible sticking point could come if your property has any outstanding maintenance. Make sure everything is in full working order, and that you’re compliant on aspects such as gas and electrical safety. A tenant will be more unhappy about an increase if the boiler’s on the blink, and could easily escalate an issue through legal channels.
Do the maths.
Make a spreadsheet of rental income, and subtract all associated costs. The numbers might not match up. £1,000pcm is soon swallowed up by mortgage, maintenance, service charges and insurances, and that’s before an inevitable increase. If you had money in an ISA at -4%, you might think twice about keeping it there.
For tenants, put the rent rise into real terms. £50 a month may seem a lot, but the price to move could be much higher. Again, check Rightmove, etc. to see what else you can get for your money—you might be better off staying put.
Do think long term.
While it’s great to be building capital, failing to incrementally increase rent will only see a big jump to bring in line with the market later on. A big jump is harder to pass on to a tenant, but smaller, regular raises are more palatable. Leaving rent below what the market dictates will compound, seeing you essentially giving money away. You could quickly be out of pocket.
Don’t forget your ‘why’.
Not all landlords get into the rental game for greed. Orchards works with integrity, aligning our business with landlords we’d be happy to rent from ourselves. Landlords often make a rental investment for retirement, to pass inheritance to children, or to make life that bit easier. Remember your ‘why’ when raising the rent.
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Do use a lettings agent like Orchards:
01525 40 22 66
ampthill@orchards.co.uk
