New landlord (me) - some queries

ButterCheese

Hoping for some opinions please, from fellow private landlords and tenants.

I have been renting out my house for nearly a year, and had to replace so far fridge/freezer, dishwasher and get the doors fixed.  As a result I've spent over £1000 so far this year, so is it reasonable to increase the rent in alignment with the consumer price index?  I was thinking raising by 5% when the year is up.  Is this common, or does it depend on the landlord?  The tenants are good and want to stay there long term, but I'm already only charging 80% of the market value for rent so I feel justified in raising it a bit.

Second point:  garage door.  It's an up-and-over type, which tenant complained wasn't working properly.  I have fixed it, but have also been quoted for a new one.  I'm happy to pay the £1000 for like-for-like, but the tenant has said it would be nice to have a roller type (which is £700 more).  Is it fair to ask them to pay the additional £700 if they want the roller type?

TIA

motorman99

In order:

you can adjust for whatever it is worth per calendar month in line with the local market. You can sell a £5 note for £6, you can’t get £1500 for a house that’s worth £1250 either. 

Replace it like for like unless YOU think the more expensive one will increase the property value or saleability. Don’t let the tenant pay anything otherwise they might try to remove ‘their’ garage door when they move out. 

RHemmings

In my experience, it is normal for rents to be increased and the tenant shouldn't be surprised. An RPI increase of 5% sounds reasonable to me, based on the assumption that the current rent was reasonable a year ago. 

Asking the tenant to pay part of the cost for improvements is a bit less normal. Paying for a like-for-like new garage door sounds reasonable to me. Asking for the extra £700 for a better door is something more unusual, and I'm not sure I would like that when I was a tenant. But, you could offer. 

I wouldn't say it's unfair to ask for the additional £700, and your tenant may agree. But, I think this is the kind of thing that could cause concerns for the tenant - e.g. will you ask for other sums of money in the future. 

One thing you could do is suggest two possible rent increases to the tenant. Maybe 5% if they want the house as it is. Or 10% if the tenant would like you to be improving the property. I would expect the tenant to choose the lower one. But, even this is unusual and could cause your landlord-tenant relationship to become more difficult. E.g. they may expect improvements over and above what can be paid for out of the increased rent.

If I was in your situation, I would say to the tenant that you will be replacing the garage door with a good quality like-for-like door. But, if the tenant would like the property to be upgraded beyond the normal maintenance expected of a rented property, then perhaps they (the tenant) could suggest how you and they could could to some agreement. Mention that you will be limiting a forthcoming rent increase to RPI which is a fair rent for the property as it currently is. That would put the ball into the tenant's court. 

user1977

The market rent is the market rent, it's got nothing to do with particular repairs etc you've carried out. Those are overheads of your letting business for you to deal with.

ButterCheese

RHemmings said:

In my experience, it is normal for rents to be increased and the tenant shouldn't be surprised. An RPI increase of 5% sounds reasonable to me, based on the assumption that the current rent was reasonable a year ago. 

Asking the tenant to pay part of the cost for improvements is a bit less normal. Paying for a like-for-like new garage door sounds reasonable to me. Asking for the extra £700 for a better door is something more unusual, and I'm not sure I would like that when I was a tenant. But, you could offer. 

I wouldn't say it's unfair to ask for the additional £700, and your tenant may agree. But, I think this is the kind of thing that could cause concerns for the tenant - e.g. will you ask for other sums of money in the future. 

One thing you could do is suggest two possible rent increases to the tenant. Maybe 5% if they want the house as it is. Or 10% if the tenant would like you to be improving the property. I would expect the tenant to choose the lower one. But, even this is unusual and could cause your landlord-tenant relationship to become more difficult. E.g. they may expect improvements over and above what can be paid for out of the increased rent.

If I was in your situation, I would say to the tenant that you will be replacing the garage door with a good quality like-for-like door. But, if the tenant would like the property to be upgraded beyond the normal maintenance expected of a rented property, then perhaps they (the tenant) could suggest how you and they could could to some agreement. Mention that you will be limiting a forthcoming rent increase to RPI which is a fair rent for the property as it currently is. That would put the ball into the tenant's court. 

Thanks for the advice.  I would have just replaced like for like, but the tenant said they would prefer a roller door (more clearance to park in front), and would pay extra towards it.  But good points have been made about ownership - maybe I should draft an agreement between the two of us to say that if they move out, then I have to pay them back the extra they put in for the door.  They can't take it with them, as it's made to measure

ButterCheese

RHemmings said:

I wouldn't say it's unfair to ask for the additional £700, and your tenant may agree. But, I think this is the kind of thing that could cause concerns for the tenant - e.g. will you ask for other sums of money in the future. 

Yes good point.  It was them who suggested paying extra for a roller door, but reading other comments it does pose a potential problem, and I also don't want to set a precedent i.e. I have no intention of improving the property out of my own pocket when I'm not living there.  I will speak to them about it and suggest that we sign an agreement that I have to buy their share of the door from them if they move out

ButterCheese

motorman99 said:

you can’t get £1500 for a house that’s worth £1250 either. 

It's worth £1000-£1200/month going by similar properties in the area, and there are very few.  I'm charging £850.  But yes I will have another check online and ensure I'm not selling them or myself short

RAS

in which case you are quite justified in charging the tenants £1000 and letting them know it will go up again next year.

I wouldn't even negotiate with the tenant about the garage door, and certainly wouldn't reimburse them at the end of the tenancy.

How come you need a new fridge freezer and washing machine? What was the problem with the doors?

You are running a business not a charity.

[Deleted User]

Is there a reason that you are charging them under the market value in rent? You will not be thanked for this.

OK, they are entitled to ask, but I wouldn't take it that you would be likely to drop an unnecessary £700 extra on top of a garage door repair. Managing expectations is an important part of landlording.

I would increase the rent to market value.

theartfullodger

does the tenancy agreement state anything about rent increases???

You'll appreciate tenant doesn;t have to agree to your suggested rent increase (unless well defined in tenancy agreement) just as you don't have to agree with any suggested (say) reduction in rent from tenant.

Done any training in how to be a landlord and/or landlord/tenant law?

ButterCheese

RAS said:

I wouldn't even negotiate with the tenant about the garage door, and certainly wouldn't reimburse them at the end of the tenancy.

How come you need a new fridge freezer and washing machine? What was the problem with the doors?

You are running a business not a charity.

Yes valid points.  I could just replace the door with an up-and-over but it was they who suggested a (more expensive) roller door so they'd have more room in front to park the car; and at the time they suggested paying the extra if it was an option.  I just wouldn't want them to move out in a few years time and there be arguments about the door that they had paid towards, as someone else rightly brought up.

New appliances were bought just over a year before they moved in, and they both stopped working so I had to replace like with like (they were just out of guarantee).

I know it's a business, but for me it's also about doing the right thing.  I took a big chance by helping them out (they were kicked out of their previous place of 16 years, and landlord did a runner so no references).  I did some background checks and agreed to lower the rent to what they could afford, but they have since got FT jobs so I don't feel so bad about raising the rent now I think about it