Fair rent increase?

G_M

cjdavies wrote: »

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.

Big assumption.

This is a cottage, with a cess pit, so obviously rural location and probobly off the gas grid.

Oil fired boiler. No annual safety check required. I get mine serviced every 2 or 3 years but that's optional.

chanz4

if no rent increase in tenancy whats in it, have you protected their deposit?

bobbymotors

ognum wrote: »

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.

^^^^^^^^ This ^^^^^^^

You need to get what its worth while at the same time keeping good tenants.

They will be perfectly aware of what its worth, so kick off at £950 for a year then £1000, then £1050 then £1100 etc.

Until you are 10% below market rate. At 10% below what its worth you can afford to be picky with new tenants if the existing ones leave.

My guess is that they won't

cadon

My last LL was a professional who owns and lets out a substantial number of properties. He generally doesn't put the rent up until a tenant moves out, then he advertises at what is then the (increased) going rate.

He charged me the same rent for over four years (in London no less).

I was happy for him and his tradesmen to let themselves in with keys when I wasn't present, I made myself scarce for viewings in my last month there, I moved out when I said I was going to, I didn't dispute a single deposit deduction and I gave him a glowing reference.

If he had suddenly asked me for an extra £100 a month, I would have paid it, but I might have been less helpful and started enforcing my right to quiet enjoyment. Just something to think about.

A cottage sounds less desirable than a London pad - what's the demand in your area like? Would you easily re-let it at the new rates, or do people generally not move around much?

Apoorwoman

Thank you for all your advice. We are ‘accidental’ landlords as the house was meant for a family member, but due to unforeseen circumstances this didn’t happen, hence we had to rent it out.

The tenants initially took the cottage on a six month tenancy while they looked to buy a house, but I think got comfortable and enjoy the village life. To buy a similar property now would prove both difficult and expensive (now a national park) and they are not ones to make decisions easily.

We pay for all the ‘extras’ as we wanted to make sure they were carried out and it is easier for them to be done at both houses at the same time.

Yes, we have let this drift, but we only wanted the rent to cover running costs on our own home since we retired. By the time we have paid the tax on this income, it doesn’t look so lucrative.

We don’t want to lose them as I said they are good tenants but I don’t think they realise quite how much they are being subsidised. As already mentioned if they were paying sewage rates elswhere that would add another circa £400 a year to their rental costs.

But you have given us food for thought and we will take onboard your comments.

Clutterfree

OP, just explain to them like you have on here in your last post that the figures no longer add up. I bet every year they've expected a rent increase because it's long overdue.
Good luck!

anselld

That is the level to which you are currently subsidising your tenants if your assessment of market rent is correct.

Miss_Samantha

Apoorwoman,

You said that the rent was £895 a month and that the current market value is in the region of £1300-£1500 a month.
So as mentioned previously, based on those figures you are currently losing out on between £4,860 and £7,260 a year.

You need your business hat on now!

(Do ignore the unsavoury comments...)

Norman_Castle

Apoorwoman wrote: »

We pay for all the ‘extras’ as we wanted to make sure they were carried out and it is easier for them to be done at both houses at the same time.

Yes, we have let this drift, but we only wanted the rent to cover running costs on our own home since we retired. By the time we have paid the tax on this income, it doesn’t look so lucrative.

We don’t want to lose them as I said they are good tenants but I don’t think they realise quite how much they are being subsidised. As already mentioned if they were paying sewage rates elswhere that would add another circa £400 a year to their rental costs.

Work out exactly how much these service costs have increased during their tenancy and use this as an introduction to a rent rise explaining you need to pass on these costs. Give them the option of removing some services on the understanding they complete the work to the same standard.
Services such as cesspit emptying may be cheaper if done at numerous local properties so you can still share the saving but not the costs.

I pay service charges. These are separate from the rent and are charged at cost.

Apoorwoman

Miss_Samantha wrote: »

Apoorwoman,

You said that the rent was £895 a month and that the current market value is in the region of £1300-£1500 a month.
So as mentioned previously, based on those figures you are currently losing out on between £4,860 and £7,260 a year.

You need your business hat on now!

(Do ignore the unsavoury comments...)

Sorry, see your point, but we are only planning on a £1,200 increase per annum, not up to the market rate.

We are not money grabbers, just trying to be fair.