I’m just wondering how other landlords calculate rent increases.
My only aim is to keep up with inflation.
I let two properties, in one the tenant has been in place one year, the other since May 2022. I’ve not raised rents for either since moving in.
Would it be reasonable to use an online inflation calculator?
The rate of inflation is measured across a whole host of things so perhaps not the greatest measure for housing costs. I decided on a rate this year - 5% - based on what seemed a reasonable % & a reasonable £ figure. Social housing rents went up by 7% & inflation was well above so I felt I could justify this amount. It also kept my rents well below MV but was more than my usual 2-3%.
I normally use earnings (official measure is average weekly earnings index) as a starting point but then make an adjustment based on maintenance, for good tenants (look after well/provide access for tradesmen etc) I generally deduct 2% per year for first 5 years so that after 5 years rent would be 10% lower relative to average earnings. For average tenants then increase inline with earnings index. If maintenance is higher than expected due to tenant behaviour then I’d increase upto market rates.
I’d also go with 5% or so at the moment.
Inflation is really irrelevant to any price negotiation. What’s important is the current market rental price for the property, and this you would find out by looking at currently advertised & similar properties in your area.
Inflation might be 10%, but if rental prices in your area have gone down, you’ll find it difficult to raise rent.
I have alerts set on property portals so that when one similar to one of ours is advertised, i can see the market rate. Gives me a good idea what i can do for rent rises.
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