Fair rent increase?

missbiggles1

Could you offer them the choice of a smaller rise and fewer services? I've never heard of window cleaning and gardening included in rent before.

frugalsmurf

I'd do it in two leaps as others suggested.

The tennants may know they're paying less than the market, so expect it.....no one knows....but charging so much less than the market value doesn't sound that good.

If the tennants leave, op could get tennants who wreck it yes...But they could also get nice tennants and an extra £400 a month

Davesnave

missbiggles1 wrote: »

Could you offer them the choice of a smaller rise and fewer services? I've never heard of window cleaning and gardening included in rent before.

...And paying to empty the cesspit means you're paying for their exemption from the water company's sewerage charges.

G_M

which is why the tea and cake is important!

Propose an increase, explaining why, and assess their response. Then decide whether to

* increase by £100
* stage the increase
* reduce services instead/as well
* accept their notice and advertise for new tenants
* find some other mutually acceptable option

It's all about the communication.

ognum

This is a difficult one

why have you not increased the rent in seven years if market rent has risen that much?

Do you think it's time to actually create a buisness plan, treat your investment as a buisness.

I believe in maintaining rents about 10% below the market rent for the area. I review rents every two years, I have only had one set of tenants leave after a year and they went back to parents to save to buy. The rest stay long term.

As you have failed to keep abreast of market rents for this long I think you should go and visit the tenants and discuss the situation, explain your need to move closer to market rent and discuss how you will achieve this.

Marvel1

Apoorwoman wrote: »

This rent includes: boiler service

I assume this is part of the gas safety check which has to be annually anyway by law.

If not then the boiler service benefits yourself more than them.

ellie27 wrote: »

Their tenants have been there for 7 years paying the same rent of £895 without any increase when the current rate is around £1300. I certainly do not think the OP is greedy!!!! Sounds like the most generous landlord ever!

My mortgage has not increased in 7 years either and it's not fixed

always_sunny

ellie27 wrote: »

Their tenants have been there for 7 years paying the same rent of £895 without any increase when the current rate is around £1300. I certainly do not think the OP is greedy!!!! Sounds like the most generous landlord ever!

yeah right, till years 7 and then OP is increasing the rent in bulk with arrears.

Apoorwoman wrote: »

Rent increases are not mentioned on the agreement. What we are proposing is just over 10%, but this will be the first increase for seven years, so works out at less than 2% per year.

Anything more than 2% a year and it's really a lot.
Rents are often high already and for many wages do not grow as fast.
Have the cost for you increased 11% in a year?

Miss_Samantha

Hi Apoorwoman,

I think you really need to change your mindset. You are running a business. Letting the rent slip so much behind has cost you thousands over the last 7 years.

If the current market value is £1300-£1500 then any rent increase up to that point would be fair. It's as simple as that.

The question is how to soften the blow for your tenant (if you want to soften the blow) and whether you wish to keep the rent slightly below market so keep your tenants happy.
If they can afford it then do not spread the increase too much: There is not point. If they cannot afford it then it is time to assess whether you can continue to in effect subsidise their lifestyle.

For now on, you should really track the market and increase the rent in line with it. A small increase every year or every two years will not cause such a shock and will avoid the situation you are in.

Marvel1

If you want to rent at £1300, issue a section 21 (if not on fixed term). Then advertise at that price.

Risk involved is bad tenants compared to now.

always_sunny

Miss_Samantha wrote: »

If the current market value is £1300-£1500 then any rent increase up to that point would be fair. It's as simple as that.

My LL decided to increase my rent to 'current market value' and after a month he has decreased it what I pay now. Market values by EA are based on ideal factors...