Landlords - would you increase the rent?

Mr.Generous

lika_86 said:

You ask about whether those who work for someone want a general cost of living pay rise. Comparing yourself with an employee is a bit of a false equivalence here. You aren't working for your tenant. Actually, they're the one who is working for you. Their work is paying your living costs.

Interesting thought. I bought wrecks that nobody wanted to live in, renovated and sold. When I had enough cash to keep one I did and let it out. We lived from my wifes wages and a very small contribution from me for about 3 years. I worked 7 days a week, then 6, then 5. Anyone who thinks renovating is cushy and lucrative try it!!

I slowly built a portfolio, but I also started spending on myself and my family rather than putting everything back into the business. I now do only the property call outs although I do manage a few other rentals with my brother it's not a lot of work.

The idea that It's so easy and I just live off the work of others then I'm amazed everybody doesn't do it.

Do I think landlords should be entitled to guarantee returns year on year? No. No other investment offers this. 

I agree. If market rents fell I'd expect mine to go down. That's life. But they are going up - I'm talking about a 2% rise roughly. This may give an indication of the market:

The fact that landlords rarely accept that some years they're up and some years they're down but will be better off generally in the long run is what leads to a distortion of 'the market' because everyone increases their rents to preserve their own position, generally at the cost of those who don't have much, if any, choice.

How do they go down if landlords don't accept this?

You've had a range of views. You're clearly leaning towards increasing the rent. Do what you like. 

Of course I'll do what I like, but thanks for your valued contribution to the discussion.

MikeJXE

From a tenants point of view for what it's worth. Showing rental increases 

East Midlands, 4 flats in 5 years, only moved for location. Single male occupier and left each flat as I found it. 

1st flat NG9 2 bed 1st floor 575 per month stayed 9 month, now 695 

2nd flat LE65 2 bed 1st floor 595 per month stayed 10 month now 725

3rd flat LE65 2 bed 1st floor 595 stayed 2 year now 695

Current flat  LE65 1 bed ground floor 625, have been here since February and have no intention of moving. The landlady is very nice and seems very reasonable but she did mention her mortgage is increasing, my point being mortgages will come down but I doubt rents will. She did try to sell last year. The kitchen taps were stiff to turn so I asked if I could change them she said yes send me the bill but I didn't allow her to pay, the fridge packed up and she replaced it the same day, the push button on the toilet fell to bits so I bought a new part and fixed it myself, she doesn't know. When I applied for this flat I did consider it a bit expensive for a 1 bed but for me the perfect location. 

She knows I will stay here till the end of my days or god forbid a care home. Will she put the rent up ? I expect her to but not by much 

Murphybear

housebuyer143 said:

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. 

I totally agree.  I was a letting agent for years and know a good tenant is worth hanging on to.  You sound like you are a good landlord as well.  That makes for a great relationship.  If she has put in new carpets and flooring and done a good job of decorating then that is worth money to you as it saves you from having to do them.  If you can happily manage on the current rent I would not increase it.

BobT36

lika_86 said:

Mr.Generous said:

Some really interesting comments. I'd like to pose another question - but there's an obvious connection.

Those who work for someone, when you want/get/expect a pay rise is the value of the pay rise limited to only your costs in relation to work? Your travel costs, your work clothing for example. Or do you take into account the cost of living?

As a landlord, believe it or not, I still buy food, clothing, pay energy bills, council tax, car & house insurance and everything else. When the cost of living rises it's not just the tenants who feel the pinch.

Whether I have mortgages or not it's really interesting how judgemental people are. I should only put up the rent in terms of landlord cost increases and take a real terms cut in living standards every year. To do anything else would be unfair on my tenants because I am lucky enough to own property.

On this basis I presume builders only increase their prices in line with material costs and draw the same wage as they did years ago? Mechanics, electricians, decorators all the same. Somehow landlords are different.

You ask about whether those who work for someone want a general cost of living pay rise. Comparing yourself with an employee is a bit of a false equivalence here. You aren't working for your tenant. Actually, they're the one who is working for you. Their work is paying your living costs. 

Do I think landlords should be entitled to guarantee returns year on year? No. No other investment offers this. The fact that landlords rarely accept that some years they're up and some years they're down but will be better off generally in the long run is what leads to a distortion of 'the market' because everyone increases their rents to preserve their own position, generally at the cost of those who don't have much, if any, choice. 

You've had a range of views. You're clearly leaning towards increasing the rent. Do what you like. 

Landlords also get equity in their property (FAR outtripping salary rises and making home ownership for others harder), and another roof over their heads available, shout they need one. 

housebuyer143

I understand rental is a business, I myself was a landlord for years but you don't need to detach yourself from the fact that this is someones home you want to make ever increasing profits from. 

I definitely don't think you should lose money as in pay for the tenant to live in your house, but if you are making good money and it sounds like you are then consider for a second if you need to increase the rent. Many landlords consider BTLs to make money on the equity increase which you will no doubt be making money from also.

You have worked hard and been lucky in life, and many others do not get the same opportunity and therefore find themselves at the mercy of the rental market and high fluctuation rents with the poorest m society being the most disadvantaged. 
You will do what you want, but as I said before a good tenant to me is worth more than a token increase of £15 a month. 

Mr.Generous

housebuyer143 said:

I understand rental is a business, I myself was a landlord for years but you don't need to detach yourself from the fact that this is someones home you want to make ever increasing profits from. 

I definitely don't think you should lose money as in pay for the tenant to live in your house, but if you are making good money and it sounds like you are then consider for a second if you need to increase the rent. Many landlords consider BTLs to make money on the equity increase which you will no doubt be making money from also.

You have worked hard and been lucky in life, and many others do not get the same opportunity and therefore find themselves at the mercy of the rental market and high fluctuation rents with the poorest m society being the most disadvantaged. 
You will do what you want, but as I said before a good tenant to me is worth more than a token increase of £15 a month. 

It's the ever increasing profits bit I love. Landlord insurance up this year .... let me check ... £42. Thats one cost.

My council tax rise at home means I'm worse off unless my income rises. I know it's really hard to grasp but if costs go up and income remains the same you are worse off. Lucky I dont cut grass for a living or until a mower broke I'd have to charge the same price for ever.

horsewithnoname

Mr.Generous said:

Some really interesting comments. I'd like to pose another question - but there's an obvious connection.

Those who work for someone, when you want/get/expect a pay rise is the value of the pay rise limited to only your costs in relation to work? Your travel costs, your work clothing for example. Or do you take into account the cost of living?

As a landlord, believe it or not, I still buy food, clothing, pay energy bills, council tax, car & house insurance and everything else. When the cost of living rises it's not just the tenants who feel the pinch.

Whether I have mortgages or not it's really interesting how judgemental people are. I should only put up the rent in terms of landlord cost increases and take a real terms cut in living standards every year. To do anything else would be unfair on my tenants because I am lucky enough to own property.

On this basis I presume builders only increase their prices in line with material costs and draw the same wage as they did years ago? Mechanics, electricians, decorators all the same. Somehow landlords are different.

I work in the public sector, my pay has fallen in real terms since the first round of austerity in the late 2000s. Fortunately I own my home or else I’d be in trouble like so many of my younger colleagues are. Those who rent have found their rents have gone from around a quarter to around a half of their pay. 

Everyone should be able to make a decent living and afford their lifestyle. 

It’s nice to hear of a decent tenant meeting a decent landlord by the way, hopefully you both value each other. 

In the circumstances you describe I wouldn’t consider a small rise to be outrageous. 

theartfullodger

Nah, leave rent asis until next year.  A good tenant like that is to be cherished. 

I'd probably have a chat with tenant about it, somewhere neutral (eg café or pub): You buying, obvs...

MikeJXE

MikeJXE said:

From a tenants point of view for what it's worth. Showing rental increases 

East Midlands, 4 flats in 5 years, only moved for location. Single male occupier and left each flat as I found it. 

1st flat NG9 2 bed 1st floor 575 per month stayed 9 month, now 695 

2nd flat LE65 2 bed 1st floor 595 per month stayed 10 month now 725

3rd flat LE65 2 bed 1st floor 595 stayed 2 year now 695

Current flat  LE65 1 bed ground floor 625, have been here since February and have no intention of moving. The landlady is very nice and seems very reasonable but she did mention her mortgage is increasing, my point being mortgages will come down but I doubt rents will. She did try to sell last year. The kitchen taps were stiff to turn so I asked if I could change them she said yes send me the bill but I didn't allow her to pay, the fridge packed up and she replaced it the same day, the push button on the toilet fell to bits so I bought a new part and fixed it myself, she doesn't know. When I applied for this flat I did consider it a bit expensive for a 1 bed but for me the perfect location. 

She knows I will stay here till the end of my days or god forbid a care home. Will she put the rent up ? I expect her to but not by much 

That was back in December, I have now (18th Feb) passed the 12 month mark and no she hasn't put the rent up

I'm not sure thats a good or a bad thing as I would prefer a small increase yearly rather than a large one as and when.

I did for a few days think about suggesting this to her (I like to be fair) but then thought maybe best to leave things alone

As afore mentioned rents are still going up, similar flats to my 2nd and 3rd 2 beds are now £750 in the same block

RHemmings

MikeJXE said:

MikeJXE said:

From a tenants point of view for what it's worth. Showing rental increases 

East Midlands, 4 flats in 5 years, only moved for location. Single male occupier and left each flat as I found it. 

1st flat NG9 2 bed 1st floor 575 per month stayed 9 month, now 695 

2nd flat LE65 2 bed 1st floor 595 per month stayed 10 month now 725

3rd flat LE65 2 bed 1st floor 595 stayed 2 year now 695

Current flat  LE65 1 bed ground floor 625, have been here since February and have no intention of moving. The landlady is very nice and seems very reasonable but she did mention her mortgage is increasing, my point being mortgages will come down but I doubt rents will. She did try to sell last year. The kitchen taps were stiff to turn so I asked if I could change them she said yes send me the bill but I didn't allow her to pay, the fridge packed up and she replaced it the same day, the push button on the toilet fell to bits so I bought a new part and fixed it myself, she doesn't know. When I applied for this flat I did consider it a bit expensive for a 1 bed but for me the perfect location. 

She knows I will stay here till the end of my days or god forbid a care home. Will she put the rent up ? I expect her to but not by much 

That was back in December, I have now (18th Feb) passed the 12 month mark and no she hasn't put the rent up

I'm not sure thats a good or a bad thing as I would prefer a small increase yearly rather than a large one as and when.

I did for a few days think about suggesting this to her (I like to be fair) but then thought maybe best to leave things alone

As afore mentioned rents are still going up, similar flats to my 2nd and 3rd 2 beds are now £750 in the same block

I see that you're somewhere vaguely near Ashby. The rises you've been experiencing seem mild compared to what is going on here. 

I left a 3 bed house in Leicester at £620pcm two years ago. I moved into another 3 bed but bigger for £900. However, most of that change was going from under market rent to a market rent. The rent increased last year to £925. Now that I'm leaving, the asking rent is £1100. Given the number of people viewing, I think they'll get asking rent, at least. 

If I had stayed in my rented house, I have no idea what the rent would have been increased to, or whether it would have been £1100pcm or near to that. But, the upwards direction is clear. 

If the OP in this thread only increases the rent a modest and reasonable amount, as seems to be likely given the discussion, I hope that their tenant appreciates that they are being reasonable.