Real-life MMD: Should I up the rent and risk losing a great tenant?

in Money Saving Polls
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Money Moral Dilemma: Should I up the rent and risk losing a great tenant?


I’ve had the same tenant for ten years and haven't increased the rent once, but I’ve recently learned the house next door is rented for £250 a month more, in pretty much the same condition. My tenant works in a low paid (but, to my mind, valuable) job and doesn't have much money and so wouldn't be able to afford this kind of rise. Do I continue getting way below market value or carry on giving an essential worker and nice person a break?
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Replies

  • Why not consider a staggered rise? Discuss it with your tenant, and say you want to rise it slowly towards the market value over the next couple of years? That way you can get more money, and they can prepare for it.
  • lorrdevllorrdevl Forumite
    36 Posts
    Part of the Furniture Combo Breaker
    Forumite
    In my experience a good tenant who doesn't abuse your property is worth coming to a reasonable agreement with.
  • I was in exactly the same position as you. Had great long term tenant on same rent and found out others paying more. However with a bit more investigation I found out that those landlords had a much greater turn over of tenants with many vacant months in between so tho it appeared those landlords were making more, in reality it worked out about the same but for me I didn't have the extra hassle of cleaning the property, paying agents fees, etc. a good tenant should be rewarded and are like gold dust. Stick with the same rent - I don't advise raising it I believe in karma. . Greed never pays off - look at all those greedy property moguls who have gone bankrupt since the recession started.
  • catkinscatkins Forumite
    5.7K Posts
    I've been Money Tipped!
    I am not a landlord but I know a few people who are and most of them have had at some stage the tenants from hell!! Not paying the rent, damaging the propert, leaving the property in a disgusting condition, doing a runner owing rent etc etc.

    I rent my house and my landlord has not put my rent up in the 7 years I have lived in the house. He had some bad tenants before and when me and OH moved in the house, although not in a terrible state, did need some work. We have completely redecorated the whole house, put in a new bathroom, replaced carpets and various other things. Our landlord has not had to spend a penny - we did it because he was not prepared to. I think he knows when he is well off!
    The world is over 4 billion years old and yet you somehow managed to exist at the same time as David Bowie
  • If the tenant's good (pays rent on time, keeps the house in good condition etc) and you're not in need of the money (which it doesn't sound like you are) then I'd stick as you are.
    "A mind needs books as a sword needs a whetstone, if it is to keep its edge." - Tyrion Lannister
    Married my best friend 1st November 2014
    Loose = the opposite of tight (eg "These trousers feel a little loose")
    Lose = the opposite of find/gain (eg "I'm going to lose weight this year")
  • I agree with virtually all the comments above, but one thing no-one has asked is what the rent is - if we are talking a difference between £1250 and £1500 then probably best to stick where you are or just raise it slightly; if however the market rent is £500 and you are only charging £250 you obviously need to do something.
  • pc1271pc1271 Forumite
    279 Posts
    Surely a good, reliable, long term tenant is worth sacrificing some income for. If you increase the rent by £250, he will likely move out and potentially leave you with no income, or tenants from hell.

    Have your costs increased? If not, why do you believe you deserve to take more money from your cash-strapped tenant?
  • littleratlittlerat Forumite
    1.8K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    I'd agree a full £250 raise is probably counterproductive, but after so long I don't think some raise would be out of the question - possibly more like £50 a month raise.
  • I agree with what all the other posters have said.

    The only other issue which may help if it applies is whether your tenant could qualify for help with an increase in the rent from their local council due to their low income.

    So if you do need to raise the rent, discuss the best ways to do it and see if you can help your tenant to stay.
  • bogwartbogwart Forumite
    117 Posts
    Do you know of anything else which hasn't been subject to inflation over the past ten years? If your tenant is in low-paid employment s/he should be able to get help with the rent from the local council, as I imagine the rate being paid now is well below the average for the area.

    If he's been a good tenant for ten years that's a good thing. You tend only to hear about the tenants-from-hell, but there are plenty of good ones out there. If necessary, and depending on whether the rent you are charging will stand it, if he does opt to leave you should consider giving management and rent collection over to managing agents. They will charge you for the service, but it does give you some peace of mind.

    The bottom line is that your tenant has carried out his side of the bargain for ten years, and you have been more than fair in sticking to a ten-year old rent. You don't need to up the rent by £250 a month, but I don't think it is asking too much to ensure that you are getting some kind of return on your investment.
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