Hi, what would most people think a reasonable percentage increase in rent is? I haven’t put my prices up for awhile - to be honest normally increase it once the tenant moves out. I need to put one up as its way below market value but don’t want to scare the tenant but at the same time he knows hes getting it very cheap. Also how offer do people put them up, yearly?
I usually increase yearly.
In some cases I haven’t as I have good tenants and the income is adequate
It depends on the circumstance. Have I done work etc
In a house which was below market value I have increased it by 5% with a view to the same in the next twelve months to bring into line with market rates
I review it annually but if tenant is good this normally results in no change in rent. I have tenants with no increase for 6 years, so currently well below market rates but they are great, do the maintenance and the savings I make on void periods and management means I’m happy for rent to be below market rates as still makes sense as an investment. It depends how much time you want to put in. I work full time so prefer less rent for less work, if (big if) the tenants are good, if not and I have to do extra work then I would increase annually.
Ultimately it is reasonable to charge market rates although unless there is a specific reason it is best to do this gradually with rises of upto 5% pa.
Thanks everyone, that’s what I thought, they’ve been in for 4 years so 5% but to a rounded figure sounds about right. Is there a way to alter the contract through open rent to do it or do I need to do a new contract? I thought there might be a bit somewhere that means you can increase it yearly without a new contract. Again thanks for your help.
Do you have a rent review clause?
Is the periodic statutory or contractual
You must give a months notice (a full rental period)
If no rent review clause you need to serve a section 13
If you do just write to them and get them to confirm in writing
There are templates on the Tessa S website
Personally I would write the AST again and get a renewal from the guarantor
Guarantor responsibility expires with the rent increase
The NRLA have a good guarantor template
If you do renew AST I would advise to reserve all documents again, alarm, water checks and check with your deposit provider what needs to be done etc etc
Thank you this is very useful.