How much should I increase rent to cover new tenant?

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  • How much should I increase rent to cover new tenant?

    I have a three bed house let to a Philippino family and their friend. They are a married couple with a young son and their female friend who said at the time she signed the contract that she was hoping to be joined by her husband and her young son. Their visa applications were successful and they are currently staying in the house.

    They are all good tenants and I'm keen to keep our relationship on good terms. They are all are happy with the living arrangements and would like to make this a permanent arrangement (at least until the remainder of this contract - about six months), so I have explained that we must follow the same procedure for the new tenant, filling in an application form and guarantor application (Landlordzone documents, of course) plus the normal Rentwise credit check (not sure how relevant this is to somebody who's just arrived in the country).

    I'm aware that this should be run as a HMO, but conversations with my local council have confirmed that this isn't something they insist on in these circumstances, so I may or may not go down that route. I accept that it may be a legal requirement nonetheless.

    I have explained that adding another tenant will mean an increase in the rent and they accept this, but given our good relationship I don't want to take advantage. However, my costs will increase even if I don't make it an HMO (which could involve significant expenditure) because of the increased wear-and-tear etc.

    This must be a very common situation and I was wondering if there is some kind of formula that I can use to help determine a fair and reasonable figure to use for the increase? If not any help and guidance with this matter would be most welcome.

  • #2
    How did you determine what rent to charge initially, and why can't you use the same process this time?



    • #3
      I'm really not clear why you think it's necessary or appropriate to increase the rent in these circumstances.

      When I advertise a house to let, I state the monthly rental, full stop - I don't have a variable tarriff depending on whether a single person, or a couple, or a couple with a child comes to view it.

      If it was an HMO where it was clear from the outset that you would be letting out on a per-room basis, that would be a different story.


      • #4
        I agree with the above comment. Unless I am being very naive, it has never crossed my mind to charge different amounts for different numbers of tenants in the same property.

        The only extra costs I can think of is damage or unfair wear and tear, but couldn't this be covered by just increasing the deposit?


        • #5
          I'm suprised that your council is so easy going about your house not needing HMO status given that there are in fact two housholds and more than two tenants at the moment - unless the female friend is regarded as a guest or is actually a relative. More tenants, if they have their own agreement, will only make the situation worse.

          Our council stick very closely to the rules and wouldn't let us have 3 tenants in a 2 bed house without an HMO certificate, mainly on safety grounds. Be very sure that you are on firm legal ground here, as if anything went wrong ie a fire in the property, I think you'd be liable and I doubt very much that the tenants or the council would back you up.


          • #6
            I'll leave the rent as it is then.

            The HMO issue has been discussed extensively in a thread I started last year.



            • #7
              Does anyone know what the rules are regarding HMO if two tenants have a baby? (I have two tenants in a 2-bed house.)

              Serious question! Probably dumb


              • #8
                Originally posted by pete's properties View Post
                Does anyone know what the rules are regarding HMO if two tenants have a baby? (I have two tenants in a 2-bed house.)
                Erm...I think the baby might be classed as part of the same household as the parents?

                Serious question! Probably dumb
                Yep, definitely!



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