Midyear state of affairs: A closer look at the country’s markets
With market conditions changing at varying degrees across the country, seven experts from Property Investment Profession...
Q. I have a two bedroom unit in Sydneys Inner West. When would it be appropriate to increase the rent and how should I go about it?
A. Firstly is the tenant on a lease or on a month to month or rolling lease?
The best case scenario is if the tenant is on a lease and has approximately 10 weeks until the lease expires.
- Inspect the property to make sure the tenant is looking after your investment. If not decide if you want to give them a termination to vacate at the end of the lease.
- Assess the comparable rentals by checking similar properties available for rent or if you have access to a property database check similar properties leased in the last six months
- Contact the tenant via email or telephone to advise that the rent will increase by an amount that brings it up to market rent or just below. Discuss signing a new lease.
- Arrange to sign a new lease with the tenant which incorporates the rent increase. You cant force them to sign but it is in everyone’s best interests to know how long the tenancy will be.
- Send a letter giving the tenant 60 days notices of the increase (this must be a letter, an email is not sufficient) and allow 4 days for postage
- This will mean the rent increase should start just after the lease expires.
If the tenant is on a rolling lease follow the above procedure however the best time to process a rent increase is when it is easiest to relet the property. Guess what, not all tenants will stay on when you process an increase in the rent!
Lisa Indge, Founder and Managing Director, Let’s Rent
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