Landlords - would you increase the rent?

Mr.Generous

lika_86 said:

You're mortgage free so your actual costs are minimal in the scheme of things in comparison with what you're making and are a cost of investment. Market rents are only market rents because they're driven by people who whack up their rates as far as possible either because they over leverage themselves or see the chance to make as much money as possible. If you're making a decent return, why not do the decent thing and keep the rent as is for your admittedly good tenant?

That's my dilema, is it the decent thing to leave the rent? My properties are a business and I aim to make a decent living from them. When I started and was working 7 days renovating wrecks it was hard work. Relatively easy now, but you do get stressed from time to time over repairs. My costs are low in comparison to rent, but that's because I went all out to buy mortgage free. If I'd spent loads on flash cars, exotic holidays etc and still had mortgages would it make a difference to putting the rent up?

Martico

I'd forget any increase for a year in your position, perhaps let them know that you'll probably have to increase it next year in line with costs for insurance, trades, etc. A good tenant is worth more than potentially rocking the boat after they've invested their hard-earned to keep the place in good nick

lika_86

Mr.Generous said:

lika_86 said:

You're mortgage free so your actual costs are minimal in the scheme of things in comparison with what you're making and are a cost of investment. Market rents are only market rents because they're driven by people who whack up their rates as far as possible either because they over leverage themselves or see the chance to make as much money as possible. If you're making a decent return, why not do the decent thing and keep the rent as is for your admittedly good tenant?

That's my dilema, is it the decent thing to leave the rent? My properties are a business and I aim to make a decent living from them. When I started and was working 7 days renovating wrecks it was hard work. Relatively easy now, but you do get stressed from time to time over repairs. My costs are low in comparison to rent, but that's because I went all out to buy mortgage free. If I'd spent loads on flash cars, exotic holidays etc and still had mortgages would it make a difference to putting the rent up?

Undoubtedly, yes. 

It's possible to make a decent living from anything but also recognise that if you can make life a little bit less hard for someone else then that's a really good thing. You may have worked hard, but presumably you also benefited from certain advantages that aren't available to people now - lower house prices relative to salary, perhaps the ability to get a mortgage earlier on with less of a deposit than is now demanded of people. Lots of people work really hard but can't ever get themselves in a position to buy a place to begin with.  

Landlords always want to maintain/improve their margins (mortgages or not), even when mortgage rates were super low, rents still went up, it's just greed. I've never heard of a landlord that chose to reduce rents when they remortgaged, having had years of their tenant paying the mortgage off for them.

Hoenir

Purely from a business perspective £15 seems reasonable. Better to have smaller incremental rises than suddenly inflict an unexpected hefty rise on a tenant once in a while. 

Longer term the cost of maintaining the property is steadily increasing. Replacement of kitchens, windows, bathrooms , double glazing needs to allowed for and money put by for. 

BobT36

If you don't want to be greedy, simply increase it by the amount your expenditures for the property have gone up, plus a small amount for covering anticipated ones for the year. 

Then leave it at that, and be thankful you're in a position to own multiple properties.. 

anselld

Surely a rise in line with the rate of inflation could not be considered unfair or unreasonable.  That must presumably be more than £15.
Anything less than inflation means you are actually reducing the rent in real terms.

Mr.Generous

If it makes any difference this tenant earns more than myself and my wife combined. 

Hoenir

Mr.Generous said:

If it makes any difference this tenant earns more than myself and my wife combined. 

None at all. One day they might become redundant ant be unable to pay you the rent due. Keep matters simple and business like. A good tenant is worth not upsetting but don't let them to dictate to you. 

BobT36

Mr.Generous said:

If it makes any difference this tenant earns more than myself and my wife combined. 

Not really. They own bits of paper which actually decreases in value year on year. 
You own (multiple) properties, they (presumably) own 0. You're in a MUCH better position and likely more well off in real-terms. Unless they have a LOT of money stashed! (Multiple houses-worth. In which case I can't see why they'd still be renting). 

Salaries have gone up no-where NEAR what houses have. You can easily have a very good salary in the UK, but still see home ownership being a constantly moving further away target. Yet those who have already bought? Quids in with equity, especially when own multiple. 

housebuyer143

I worked in a letting agent for years and my word of advice is do not underestimate how great a good tenant is. There are a lot of awkward and bad ones that can really make your life hard. If you have a good tenant looking after your property, paying rent and you are not losing money I wouldn't increase it. 

Better the devil you know sometimes and at least you know she isn't going to leave.