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

N77poo

There seems to be an assumption that your tenant will leave if you put the rent up - but that is only going to happen if they can find a property they are happy with for less than your propose.

As suggested elsewhere I would talk to your tenant, and tell them you want to keep them but it is time for an increase, tell them that you are aware the rent is £250 higher next door, and ask them to suggest an increase that they think is reasonable. Ideally you would want them to find alternative properties of a similar size that they could rent to justify a reduced increase.

By getting them to look they will become more focused on the market rate and more likely to realise the increase is justified and will also be at a level that won't make them leave.

If they come back with -"I cannot afford an increase" then they cannot afford to live in your house. You could still get a good tenant by undercutting the market...

clairibel

I would say if you don't need the extra rent then keep it as it is.

My mum has just spent over £1000 putting right bad tenants mess that includes doing a runner and not paying the last months rent plus all the repairs and tidy up. The stress and time it took, so disheartening.

She never put their rent up either. Good tenants are worth a lower rent.

spanielson

I'm sure a modest rise would almost be expected by the tenant after so long, I wouldn't go the full £250 though as they'll leave, but up it a little.

spursliz

I do agree that a good tenant is worth having, but I would also comment that you have done no one any favours by not keeping an eye on the annual cost of rents. You should have re-assessed this every year, and increased it, if only by a few percent. For your tenant to suddenly be faced with a large increase in rent, that you have every right to ask, is wrong. I think you should see your tenant, explain the situation, and up the rent a little telling them that this will happen every year.

alwayswrite

If you don't need the extra money then be a good guy and this will create good khama. The best of luck to you both

blameitontheboogie

Thank you all for taking the time to reply.

"one thing no-one has asked is what the rent is" £500 vs £750 next door. Having since done a bit of research another house was going for £725 but was asking the tenant to pay the £50 a month service charge [bit cheeky since it can be claimed for in tax purposes] but it's apparently still empty.

"Have your costs increased? If not, why do you believe you deserve to take more money from your cash-strapped tenant?" Yes and no. The mortgage payments have gone down [it was round the 10% mark when I first took it out] and the service charge has only gone up by £60 in the last couple of years. The rent covers the mortgage. In terms of maintenance the general costs have stayed pretty much the same but over the last year the house has been completely redone - new bathroom, kitchen, carpeting, new back door which has cost roughly a years worth of rent - a rent rise would help offset that cost. In fairness to the tenant though, they didn't complain about it before it was done.

"I suspect that you are not mortgaged to the hilt" By the grace of chance, no. I'm not a multi-landlord - it's just my old home. When I got married, I wanted to keep my house [whisper it -just in case] and as I'm down South now and the house is oop North it made sense to rent it out.

"is the landlord game really for you" It was never my ultimate aim it's true, but I won't ever sell my old home, so it does have to earn it's keep. I rented for years before I could afford my own property and had some 'interesting' landlords - just didn't want to behave like that with my tenants

"We recently signed an extra five years to keep the rent the same" An interesting idea. Just out of interest, what would happen if the landlord had to sell, say, or if you had to move for work say?

GreyQueen

You state that your tenant is on a low income. If you were to increase the rent by £250.00 you may well tip their budget from affordability into unaffordabily. Your good tenant would then have the choice of leaving you to rent elsewhere, perhaps even being reduced to living in one room in a shared home, or moving back to family, or staying and falling behind to the point where you seek possession through the courts.

Your good tenant may be replaced by another equally good tenant but at a higher rent which would be good for you. Or you may get one of the tenants-from-hell, or even a succession of them, but that is a risk only you can know if you're willing to accept. You might have extensive damage to repair and void periods between tenants with no rent coming in at all.

Many people have not seen a pay increase at all, or haven't seen one which even kept up with the basic costs of living ex rent, for well over a decade. In many areas, wages are at lower comparative levels than they were 20-30 years ago. So, the argument that rent should increase because a certain amount of time has passed is, to my mind at least, spurious. But that's just my opinion and you should follow your own judgement, of course.

I rented a shabby flat for a number of years privately. The LL never had to worry about getting his rent, the place was kept immaculately and I did much to improve it. At one point, he fielded the subject of increasing the rent. His expressed assumption that it would be a victimless hike as I would be able to make good the extra rent from the Local Housing Allowance (HB).

I knew very well that I couldn't; my modest wage was still above the eligibility criteria, and that I could only make up the shortfall by raiding savings, which would just postpone my inevitable departure. I told him frankly that this was the case and if he put the rent up as he proposed, I was very sorry but I would have to give him notice. We were very amicable but I was completely serious.

He thought better of it and kept the rent the same. We parted as LL and tenant a handful of years ago but still bump into each other in town and have a friendly chat.

With an artificially-restricted housing supply, the rental market is very much a landlord's market and essentially, you can get away with charging whatever you think the market can bear, and perhaps your personal circumstances mean you must maximise your rental income.

Whatever you decide to do, your tenant will have no choice but to lump it or leave.

tallgirld

I would leave it as it is. Why risk losing great tenants?

You could end up with awful tenants and regret it.

Maybe increase it by rate of inflation each year.

Waste_not...

If you were happy with the rent you were getting before you found out about the neighbouring property, why should anything be different now?
I'm sure the tenant would not object to a reasonable increase in the rent if you have reasonable additional costs to cover, but to force them into further hardship just because you can, seems to me to represent everything that's wrong in the world.

Mojisola

Waste_not... wrote: »

If you were happy with the rent you were getting before you found out about the neighbouring property, why should anything be different now?

I have a lot of sympathy with this but the tenant has had ten years at the same rent. Regular payment from a good tenant is worth a lot and I wouldn't want to put the rent up suddenly but you do need to put yourself in the position so that the rent is regularly reviewed.