Rent Reviews – To increase or not to increase?

We understand that prompt and ongoing rent payments are the lifeblood of property investors.

We suggest that rent levels should be maintained at or slightly below market rent levels in order to keep pace with increasing costs and to ensure that the tenant does not vacate due to an above market rent increase.

Market rate Vs. Cost of Living

When recommending a rent increase to you we take into account the nature in which the tenancy is being conducted, how the property compares with others that are presently on the market and ask, if the property became vacant today what rent would it realise? There are times that we may recommend that the rent level remain unchanged due to market conditions.

We have found that the properties for which investors increase the rent to above market levels have higher vacancy levels than those who maintain rents at or slightly below market prices. Therefore, increasing rent to above market levels is false economy as it results in a higher turn-over of tenants, high vacancy and lost income.

It is worth noting that tenants are better educated today and are aware of the market rent for a given type of property in a given location. This information is readily available by simply navigating the various internet portal websites. By increasing rents to slightly below market rent, your tenant is aware that they are not being rent gouged and are more likely to remain in the property. This ensures full occupancy for you and a continuing income stream.

Our job is to maximise the income for your investment property. We achieve this by not only increasing rents but by ensuring that you have a steady income stream and lower vacancy rates. Maintaining rents at or slightly below market level achieves both objectives.


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