Increasing rent?

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    Increasing rent?

    Morning all.

    Just a quick one really; I’ve been a landlord for about 18 months now with two properties (no mortgages) and to cut a long story short, both of the properties are Let at under market value by about £50 each. This was because both houses needed considerable work doing to them and both had tenants in upon purchase. As a good-will gesture to both tenants (and not to lose them) I issued new AST’s with the lowered rent (fixed term ends next month) and after spending close to 10k combined, I’m now at the point where the houses are complete and I am wondering about increasing the rent.

    I don’t want to whack it up by £50 a month instantly, so my question is, what is a fair annual increase either percentagly or monetary?
    And how often do you increase your rent (12 months? 24 months? Etc)

    Thanks

    #2
    I usually do about 3%. You can agree this with the tenants informally and if they start paying you're ok. If they don't then use a s13 notice

    Comment


      #3
      Originally posted by DPT57 View Post
      I usually do about 3%. You can agree this with the tenants informally and if they start paying you're ok. If they don't then use a s13 notice
      Is that 3% per year? Or just when you see fit?

      With them already paying £50PCM below market value, the 3% would actually mean that they’re still paying £20PCM below market value.

      Comment


        #4
        Property is a long term game, a vod would cost you more than 12x£20.
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          Originally posted by theartfullodger View Post
          Property is a long term game, a vod would cost you morethan12x£20.
          Of course. That's why I was happy to drop the rent (to keep them) as I didn't want the voids.

          I don't want to scare them away, which is why I was asking what's reasonable and what the more experience of you guys do with regards to "upping" the rent; is it yearly, bi-yearly.... and by how much etc.

          The 3% seems absolutely fair. Especially because it's still under valued and also because of the amount of work done to the properties.

          Comment


            #6
            Every 14-15 months, so its not a regular as clockwork thing.
            AND if you regularly up the rent to keep in line with local market also be prepared to lower the rent if local market goes down... Just my opinion, but is only fair.

            Comment


              #7
              Originally posted by RedHitman View Post

              Is that 3% per year? Or just when you see fit?

              With them already paying £50PCM below market value, the 3% would actually mean that they’re still paying £20PCM below market value.
              It was 3% each year when the market was rising but I havent increased at all for the last 3 years as prices are static and my rents are at market levels.

              Comment


                #8
                It appears you gave new AST with a new fixed term and lower rent. This should mean you cannot increase their rent during fixed term, unless they vol pay the increase.

                Comment


                  #9
                  Originally posted by mariner View Post
                  It appears you gave new AST with a new fixed term and lower rent. This should mean you cannot increase their rent during fixed term, unless they vol pay the increase.
                  From the OP;

                  (fixed term ends next month)

                  Comment


                    #10
                    Increase the rent to the current market rate if the property is good enough.

                    In a few months time it will probably still be below market rate again.

                    Voids shouldn't be a problem in most areas (you know your own market best).

                    The tenant has a lot more to lose by moving. They'd have to pay market rate anyway plus the cost and hassle of moving (IIRC about £2000 on average) and the upfront cost of moving.

                    Only increase one property at a time and give them more than the required notice period. If you can't agree a fair increase without resorting to a section 13, consider if this is a business relationship you want to be involved in.

                    The days of not increasing rents on good tenants are rapidly coming to an end

                    Comment


                      #11
                      Originally posted by boletus View Post

                      From the OP;
                      I’ve noticed Mariner has a habit of not reading posts properly and subsequently saying silly things

                      Originally posted by boletus View Post
                      Increase the rent to the current market rate if the property is good enough.

                      In a few months time it will probably still be below market rate again.

                      Voids shouldn't be a problem in most areas (you know your own market best).

                      The tenant has a lot more to lose by moving. They'd have to pay market rate anyway plus the cost and hassle of moving (IIRC about £2000 on average) and the upfront cost of moving.

                      Only increase one property at a time and give them more than the required notice period. If you can't agree a fair increase without resorting to a section 13, consider if this is a business relationship you want to be involved in.

                      The days of not increasing rents on good tenants are rapidly coming to an end
                      Thank you very much for this. Great advice and just what I was after

                      Comment


                        #12
                        If you put it down because of the inconvenience of the work, I would talk to them about your plans saying now that the work is complete and the properties are much better, you intend to put it back to what it was (or whatever figure you have in mind).

                        You can then gauge their response and negotiate as appropriate.

                        Comment


                          #13
                          I try not to make silly statements. No one can offer good advice unless you complete
                          https://forums.landlordzone.co.uk/fo...ll-new-posters
                          for rel ASTs as requested in FAQs, which you obviously did not read before posting.
                          A legal fixed term can be for 6 months - 3 years.

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