So, brilliant news, the market is buoyant and you can finally increase your rent after 3 years in a pretty stagnant market. Let's get going...my only caveat before we start would be to say don’t lose a good tenant for the sake of a few pounds a month. It is quite simply not worth the hassle of losing a good tenant, having a void period while the property is empty and paying agents fees which could in all reality lose you 2 months rent out of a 12 month period.
If you decide you do want to increase your rent my golden rules would be;
1 - If you have a good tenant and most importantly a good relationship with them always have a chat with them first. Do it over the phone if possible, emails can come across negatively if the person reading it at the other end may have had a bad day and it’s often difficult to phrase it in the right way.
2 – Know your tenants’ circumstances. Have they just had a baby? Have their hours been reduced at work? Do they have a sick relative who they possibly may need to consider caring for? Have they just had a promotion? All of the above and plenty of other life events can change the financial circumstances of your tenant. Knowing their situation can help you manage the size of the rent increase you may wish to do.
3- Take into account repairs or maintenance that may need to be done. Is it worth doing a rent increase with the agreement of the tenant and agreeing at the same time to pencil in the diary a date for the some non-essential maintenance to be done? Investing the money back into the property is good for you, the future value of the property and the tenant too?
4 – How energy efficient is the house? Bearing in mind the soaring cost of gas, electricity etc, consider how this could affect your tenant. If you house isn’t terribly energy efficient consider how this may impact the budget of your tenant moving forwards. The knock-on effect of rising energy bills may well be their ability to pay the rent.
5 – Do increases little and often. Rents in Staffordshire have remained fairly static over the past 2 years with little or no movement in the market. The sudden surge due to a lack of available stock has left many landlords surprised at the rents they could achieve. Unfortunately you cannot raise your rent by an unrealistic amount in one fell swoop so do smaller annual increases to catch up. Your tenancy agreement will usually have a clause which relates to how much rent can be increased by and when. Check these carefully as you will have to remain in line with the tenancy agreement you originally signed.
6 – Serve the correct notice at the correct time and be aware of what you need to do if the tenant does not agree.