How much to raise rent?

Tassotti

Innys wrote: »

A
While Tass takes the business driven view, I feel that keeping good tenants is as important. Obviously, the key is to arrive at a happy medium.

Not totally a business driven view.. I feel I am a great landlord and any problems that arise, I sort them out immediately. I too, understand the importance of keeping good tenants, and have never had a property empty for more than 2 weeks)

I am a friendly, approchable LL but needs must , and all of my tenants are willing to a small increase in their rent (as they willing in their petrol, food, etc prices)

Tass

SouthCoast

Whilst I have been living in my rented property the capital value has increased by 60%, so my landlord would have got a gross return of 15% p.a. even if I had lived here for free.

Statistics from:

http://www.home.co.uk/guides/house_prices_by_town.htm

Tassotti

So What!?!??

I think that anyone who takes a risk, rather than talking about it, deserves rewards.

The current property situation will weed the amateurs from the professionals, which, to me, is a good thing.

I,honestly don't care about people who have tried to get a 'pension' from property by buying new-builds from 'clubs' and have lost all.

Property investment is a business and there are risks as in other businesses.

Speculators, who have done no research will be my bread and butter!!!

Tass

hostman

Incisor wrote: »

Yes, I mentioned it. Insurance goes up as insurance goes up, largely with the cost of building, but there will be plenty of spare builders soon.

No it doesn't. We have a very competitive insurance industry in this country, if you don't claim and shop around you'll most likely pay less for your insurance from year to year. I recently helped my parents move their car and home insurance, ended up saving £200 a year. My own car insurance has fallen massively over the years.

If your cost's haven't increased, I wouldn't increase the rent for your tenant by 10%. Sure, as a business there is no problem increasing prices, if your own costs have increased. As a business owner, we have done this frequently and you shouldn't be afraid to do so. But it is always a balancing act and as has been intimated, if the tenant decides your increase is too much to stomach and leaves, you'll be left with voids which will take time to recoup.

Go for a 6% increase with the option for a two year contract.

Pygmymonkey

When I rented i was offended when one of my landlords increased the rent by approx inflation on a yearly basis. My rent included all bills so could understand a rent rise, but only on the portion that was for utitilities.
I could have understood it (maybe) if his mortgage payments had increased but it was when mortgage rates were going down.
I sympathise with you but you can't just increase rent to those levels in one go (or at short notice) I would be out of there in a shot and probably slash your tyres to boot.... You're probably the sort of landlord that doesn't give deposits back and make up lies for reasons which can't be argued against in the small claims court....

Innys

Pygmymonkey wrote: »

When I rented i was offended when one of my landlords increased the rent by approx inflation on a yearly basis. My rent included all bills so could understand a rent rise, but only on the portion that was for utitilities.
I could have understood it (maybe) if his mortgage payments had increased but it was when mortgage rates were going down.
I sympathise with you but you can't just increase rent to those levels in one go (or at short notice) I would be out of there in a shot and probably slash your tyres to boot.... You're probably the sort of landlord that doesn't give deposits back and make up lies for reasons which can't be argued against in the small claims court....

I assume this is directed at me.

Well, if so, I've got news for you. I have been a landlord for 23 years and never been taken to the small claims court - or gone to any court for that matter.

In the other house I rent out it was originally given to tenants in absolutely pristine condition. New carpets throughout, new extension, new appliances, new bathrooms, new paving, new furniture, painted from top to bottom - you name it.

Then, three years later, I get it back and it's a tip. I, therefore end up spending a week of my time renovating it - again. This included four trips to the dump with the tenants' rubbish, a morning clearing the overgrown garden, cleaning candle wax off the sills of the windows overlooking the garden, cleaning grease off the kitchen ceiling, walls and units and repainting throughout.

How much will I be deducting from the deposit? I'll tell you. The cost of replacing two bedroom carpets (due to half a dozen cigarette burns on each), new laminate in the kitchen after they scraped the finish off three pieces and six halogen light bulbs. Total? Just under half the deposit. That's why I've never been to the small claims court, and never will.

The truth is, you know nothing about me. All you know is I am a landlord and want to increase the rent on my house. In your eyes that makes me some kind of criminal. If it wasn't for landlords, you'd be homeless. I'm not saying you should be grateful, but perhaps you should think about what you would do if no one allowed you to live in their property.

Frankly, if I ever had a tenant like you, I'd be quite keen to take you to the small claims court - it would be a new experience and if I could put one over you as well, it would make my day.

dopester

Innys wrote: »

All you know is I am a landlord and want to increase the rent on my house.

Innys wrote: »

If it wasn't for landlords, you'd be homeless.

Some landlords aren't half full of self-importance. Grab your 10% whilst you still can, in this temporary shift of higher rents in some areas. Anyone who has gotten in to BTL in the last 5 years plans to ride out the storm is already caught in the pincer, but they just don't realise it yet.

owitemisermusa

Innys wrote: »

The key mistake I made, as Silvercar has pointed out, is not increasing the rent after year 1.

As someone asked, the original rent was £1,625 and I was thinking about asking for £1,800, but based on the comments here, have suggested £1,750.

If I had increased after year 1 to, say, £1,675, and this year to £1,750, I don't think I would be in this position.

Just to be clear, the rent has been:

Yr 1 - 1,625
Yr 2 - 1,625
Yr 3 - ????

This is for a house in South London with three double bedrooms, one single, a lounge/diner, kitchen, one bathroom and a separate WC. There are four tenants in the house at present.

I have checked and there is currently a house on the same street with two double beds and a single asking for £1,830 a month, though there's now way they'll get it. The bedrooms and kitchen in that house are a lot smaller than than in my house but the house seems to be in better condition. It also doesn't have a separate WC.

Bearing the above in mind, I think a new rent of £1,750 is entirely reasonable.

Yes, a great tenant is worth their weight in gold, but a landlord who deals with problems promptly and doesn't stuff tenants with their deposit is equally as rare (they moved in before the requirement for the TDS).

I guess one consideration is this: a 10% rise can vary depending on the initial rent. You're not talking 10% of say 300-400/month rent. You're looking at a good £125 increase.

Although that's more like 8%

Snooze

Unless your tenants are mugs, if you increase the rent by £125 pcm they'll be out of the door like a shot, regardless of the fact you've found one other property being advertised for more (and I say that as both a former tenant and a former landlord).

The fact that you "forgot" to put the rent up at all for the past 2 years won't be seen as a good enough reason by the tenants and I'm afraid that your options are now limited. I think a £25 increase pcm on the current price is acceptable; you might even get away with £50 but I think you'd be taking a huge risk. Speaking with my former tenant hat on, I'd seriously be looking elsewhere if you announced a £50 pcm rise on £1625.

As you haven't announced to us any increase in costs to yourself then presumably they're still the same so you're only wanting to put the price up out of greed. Speaking with my former landlord hat on, I think you'd be foolish to increase it at all given the fact that you have - by your own admission - excellent tenants. As a landlord, getting good tenants is the second biggest challenge after getting the rent money out of them - why risk all this for the sake of a few extra quid?

Your choice...

Rob

lil_me

Wow, never ceases to amaze me how much rentals are in London, I pay £625 for a 3 bed detatched with a huge garden, conservatory, garage etc I keep thinking I should stop moaning how much my rent is.

I think there are many who have offered their opinion, experience and I am doubtful that any of these will make any difference in the decision you make. However I do wonder if any of your tenants have replied.

A dwelling is an HMO if it is occupied by more than one household and amenities are shared.

So the tenants are all from one family? Or have I read that completely wrong? I know 2 single parents with one child each who currently share a 4 bed house and that is classed as a HMO.