Increasing your tenants’ rent is never easy as there is always the risk that they cannot afford to pay the extra cash and move out.
This could mean losing money due to extra charges from a letting agent for finding a new tenant or even lengthy void periods before a replacement is found.
Either way, it is important to remember that renting is a two-way street between a landlord and a tenant, meaning that a rent rise is not a guarantee for boosting your profits.
So what’s the best way to break the news? Well, you may have an agent managing the issue on your behalf or decide to break the news yourself. If you do decide to speak to your tenant directly about a higher rent, consider our seven tips to help make the conversation a success.
1. Be prepared and check the market values
This means doing your research before you speak to your tenants - whatever approach you decide to take, make sure it’s well thought through. For example, doing a quick search on a property portal (and here are some of the best property listing websites for landlords) will tell you if your rent is at an appropriate market level. You can also seek a local letting agent’s advice about market values.
2. If the rent rise is non-negotiation, take a document confirming the change
But be prepared that they may decide to serve notice and move out if they can’t afford the hike. It will mean that you’ll need to be prepared to move quickly and find new tenants to avoid any void periods.
3. Offer a concession
For example, if you’re putting up the rent, you may want to suggest that you’ll aim for it to remain at the same level for a minimum period of, say, two years.
4. Offer an explanation with the rent rise
One option is to explain, clearly, your decision. For example, you may need the rise as the government has introduced a tax clampdown on landlords and you can’t afford to keep the property without increasing the rent.
5. Provide market comparisons
Highlight local rental properties that are more expensive, even with your proposed increase. This will emphasise to the tenant that they are still getting a good deal if they stay. You can research similar properties on portals such as Rightmove and Zoopla.
6. Give plenty of notice
This is to make sure that your tenant can budget for the increase. By law, a landlord must give you a minimum of one month’s notice for a tenant who pays their rent weekly or monthly.
7. Make sure the increase is agreed and signed for by both parties
You’ll want to be backed up by hard, written evidence. Staying legal and compliant is crucial for all landlords, and you’ll want to be safe should the worst happen.
Have you recently raised your tenants’ rent? How did you handle the situation? Let us know below.