Landlord Discussion

jjlandlord

You have a negative cash flow at the moment, so I don't think that you have a choice.

If the rent has remained the same for 6 years, there is a good chance that it is now significantly below market.
You should assess the level at which the rent should be based on the market.

If you increase the rent but keep it a bit below market then your tenant will have no incentive to move. And it's not like they haven't had a great deal for years.
If they can no longer afford it, then that's another issue but it also means that they are no longer great tenants.

Cotta

I know their is no fixed answer but what is the norm for rent increases?

Cotta

Anyone know how long a LL should keep certain documents e.g. house insurance, bank statement etc?

jjlandlord

I'd say 6 years because that's generally how long you have to sue or be sued, and, if I remember correctly, that's also how long HMRC has to audit you.
So, actually make that 6 years from the end of the current tax year.

Cotta

Thanks JJ.

princeofpounds

When you say you are making a loss you are getting confused between cash flow and profit. The capital repayments are a draw on your cash but they are not a cost, as you still own that 'value', it has just changed from nice liquid cash into house equity.

As for rent rises, as jjlandlord suggests the normal practice with a good tenant would be to raise the rent but keep it slightly below market to remove the incentive to move.

There is no standard % rise, although be aware that a large % rise in one go is a shock that could drive away a tenant even if the end figure is still a reasonable deal. This is why it is good to do small rises every 1-2 years rather than wait so long and be forced to do a big rise.

Cotta

princeofpounds wrote: »

When you say you are making a loss you are getting confused between cash flow and profit. The capital repayments are a draw on your cash but they are not a cost, as you still own that 'value', it has just changed from nice liquid cash into house equity.

As for rent rises, as jjlandlord suggests the normal practice with a good tenant would be to raise the rent but keep it slightly below market to remove the incentive to move.

There is no standard % rise, although be aware that a large % rise in one go is a shock that could drive away a tenant even if the end figure is still a reasonable deal. This is why it is good to do small rises every 1-2 years rather than wait so long and be forced to do a big rise.

Very good points.

Realistically how should I be wording my current setup?