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    Real-life MMD: Should I up the rent and risk losing a great tenant?
    • #1
    • 6th Aug 12, 11:01 AM
    Real-life MMD: Should I up the rent and risk losing a great tenant? 6th Aug 12 at 11:01 AM
    Money Moral Dilemma: Should I up the rent and risk losing a great tenant?

    Iíve had the same tenant for ten years and haven't increased the rent once, but Iíve recently learned the house next door is rented for £250 a month more, in pretty much the same condition. My tenant works in a low paid (but, to my mind, valuable) job and doesn't have much money and so wouldn't be able to afford this kind of rise. Do I continue getting way below market value or carry on giving an essential worker and nice person a break?

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Page 1
    • billbennett
    • By billbennett 7th Aug 12, 8:42 PM
    • 2,270 Posts
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    • #2
    • 7th Aug 12, 8:42 PM
    • #2
    • 7th Aug 12, 8:42 PM
    Why not consider a staggered rise? Discuss it with your tenant, and say you want to rise it slowly towards the market value over the next couple of years? That way you can get more money, and they can prepare for it.
    In "Monopoly", what makes the "Super Tax" so super?
    • lorrdevl
    • By lorrdevl 7th Aug 12, 8:53 PM
    • 36 Posts
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    • #3
    • 7th Aug 12, 8:53 PM
    • #3
    • 7th Aug 12, 8:53 PM
    In my experience a good tenant who doesn't abuse your property is worth coming to a reasonable agreement with.
  • Actionh
    • #4
    • 7th Aug 12, 9:12 PM
    Good tenants are like gold dust- don't raise rent
    • #4
    • 7th Aug 12, 9:12 PM
    I was in exactly the same position as you. Had great long term tenant on same rent and found out others paying more. However with a bit more investigation I found out that those landlords had a much greater turn over of tenants with many vacant months in between so tho it appeared those landlords were making more, in reality it worked out about the same but for me I didn't have the extra hassle of cleaning the property, paying agents fees, etc. a good tenant should be rewarded and are like gold dust. Stick with the same rent - I don't advise raising it I believe in karma. . Greed never pays off - look at all those greedy property moguls who have gone bankrupt since the recession started.
    • catkins
    • By catkins 7th Aug 12, 9:22 PM
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    • #5
    • 7th Aug 12, 9:22 PM
    • #5
    • 7th Aug 12, 9:22 PM
    I am not a landlord but I know a few people who are and most of them have had at some stage the tenants from hell!! Not paying the rent, damaging the propert, leaving the property in a disgusting condition, doing a runner owing rent etc etc.

    I rent my house and my landlord has not put my rent up in the 7 years I have lived in the house. He had some bad tenants before and when me and OH moved in the house, although not in a terrible state, did need some work. We have completely redecorated the whole house, put in a new bathroom, replaced carpets and various other things. Our landlord has not had to spend a penny - we did it because he was not prepared to. I think he knows when he is well off!
    • minerva_windsong
    • By minerva_windsong 7th Aug 12, 9:45 PM
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    • #6
    • 7th Aug 12, 9:45 PM
    • #6
    • 7th Aug 12, 9:45 PM
    If the tenant's good (pays rent on time, keeps the house in good condition etc) and you're not in need of the money (which it doesn't sound like you are) then I'd stick as you are.
    "A mind needs books as a sword needs a whetstone, if it is to keep its edge." - Tyrion Lannister

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    • scarlet macaw
    • By scarlet macaw 7th Aug 12, 9:52 PM
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    scarlet macaw
    • #7
    • 7th Aug 12, 9:52 PM
    • #7
    • 7th Aug 12, 9:52 PM
    I agree with virtually all the comments above, but one thing no-one has asked is what the rent is - if we are talking a difference between £1250 and £1500 then probably best to stick where you are or just raise it slightly; if however the market rent is £500 and you are only charging £250 you obviously need to do something.
    • pc1271
    • By pc1271 7th Aug 12, 9:55 PM
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    • #8
    • 7th Aug 12, 9:55 PM
    • #8
    • 7th Aug 12, 9:55 PM
    Surely a good, reliable, long term tenant is worth sacrificing some income for. If you increase the rent by £250, he will likely move out and potentially leave you with no income, or tenants from hell.

    Have your costs increased? If not, why do you believe you deserve to take more money from your cash-strapped tenant?
    • littlerat
    • By littlerat 7th Aug 12, 10:49 PM
    • 1,672 Posts
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    • #9
    • 7th Aug 12, 10:49 PM
    • #9
    • 7th Aug 12, 10:49 PM
    I'd agree a full £250 raise is probably counterproductive, but after so long I don't think some raise would be out of the question - possibly more like £50 a month raise.
  • phoenix11
    I agree with what all the other posters have said.

    The only other issue which may help if it applies is whether your tenant could qualify for help with an increase in the rent from their local council due to their low income.

    So if you do need to raise the rent, discuss the best ways to do it and see if you can help your tenant to stay.
  • bogwart
    Do you know of anything else which hasn't been subject to inflation over the past ten years? If your tenant is in low-paid employment s/he should be able to get help with the rent from the local council, as I imagine the rate being paid now is well below the average for the area.

    If he's been a good tenant for ten years that's a good thing. You tend only to hear about the tenants-from-hell, but there are plenty of good ones out there. If necessary, and depending on whether the rent you are charging will stand it, if he does opt to leave you should consider giving management and rent collection over to managing agents. They will charge you for the service, but it does give you some peace of mind.

    The bottom line is that your tenant has carried out his side of the bargain for ten years, and you have been more than fair in sticking to a ten-year old rent. You don't need to up the rent by £250 a month, but I don't think it is asking too much to ensure that you are getting some kind of return on your investment.
  • laminki
    i concur with much of the above

    1) we need to know the actual figures to understand the significance of £250 per month and a little more about your personal circumstances. (I suspect that you are not mortgaged to the hilt, otherwise you would know the market rent full well.)

    2) a good long-term tenant with 100% occupancy, no hassles and no estate agent is easily worth upwards of a 25% rent reduction in comparison to having to change tenants every six months with all of those associated costs, hassles (deposit tribunals) and void periods.

    3) be very careful before you put the squeeze on this silver goose.
    He might not lay golden eggs, but the tenant sees the property as their long-term home and they are invested in looking after it for you.
    It sounds like your major historical motivation for being a landlord has been the hassle-free tenant rather than a love of the cut and thrust of the property game (to the extent that you haven't researched the going rent for your property for several years!)
    Has that changed? Have your personal circumstances changed?

    4) Change the tenant and you risk having to actually work and worry and graft and 'earn' your income as an landlord. That hassle may not be worth the increase in income.

    4) if the current sums don't add up then consider selling. if you have been renting the property for 10 years, there is bound to be a juicy capital gain. is the landlord game really for you if you haven't raised the rent in 10 years and you are turning to 'ask the audience' for this type of decision?
  • Purplechicken
    I definitely think its better to have a low rent and a long term tenant than vice versa. It would be unfair to implement such a large increase all at once when you really should have been reviewing the rent regularly over the last 10 years. If you haven't had any major expenditure on the property recently you could wait until you do and then make a reasonable increase in rent. Even then I would keep it below market value to be fair to your tenant and because short term lets mean expense and hassle.
    • lollipopsarah
    • By lollipopsarah 8th Aug 12, 12:38 AM
    • 1,292 Posts
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    Hey youv'e got a good tennent, looking after your property - so your house shouldn't devalue, why risk it.
    We recently signed an extra five years to keep the rent the same, son thought we shouldn't have but unless we win the lottery we reckon we will still be here.
  • Prada Bunny
    As a tennant I was in a similar position 2 years ago. I had been in my flat for just over 10 years. After 2 years of living with rotting floorboards and not complaining the landlord did some major repairs and then put the rent up by £300 a month (approx 30% rise). After being here so long it is my home, so I have stayed.

    However, I no longer decorate every year and I do not do the garden any more (except to mow the lawn) I simply do not have the money. Whereas before I would fix things myself I now call the landlord for the slightest thing.
    • sallyjo
    • By sallyjo 8th Aug 12, 5:59 AM
    • 58 Posts
    • 69 Thanks
    Should I up the rent?
    It is unfair to your tenant not to have their rent increased incrementally on an regular basis. They are now paying very much under the market value of the rent, and would have trouble finding somewhere else of the same quality. It is also unfair on you. Whilst they are cash-strapped, I would be very surprised if they have not had a rise in their wages in 10 years. Has your cost of living risen in 10 years?

    Having a good tenant is valuable, terrible tenants are a curse and you really value this tenant so it is worth keeping them by giving them a good tenant discount, but you are not a charity. Talk to your tenants and tell them you need to put in an annual cost of living rise, and make it a small increase. Tell them you are keeping it small because you value their tenancy in your property.

    The advice on this page about getting them to look at help they might get as a keyworker in paying their rent etc is worthwhile. We pay plenty of tax which provides a social net which SHOULD help the low paid in valuable jobs maintain their cost of living, help supplement rent. It is not easy to get the benefits that are available, but worthy applicants should make this effort. Maybe you can find help for them.
    Sally Jo
    Almost debt free! About 4 months to go!! YEAH
    "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." Dickens-from David Copperfield
    • charlies-aunt
    • By charlies-aunt 8th Aug 12, 7:05 AM
    • 1,581 Posts
    • 13,511 Thanks
    Good, responsible tenant has paid the amount of rent that you were happy to receive and looked after the property without any problems

    If you up the rent and lose this tenant - you will get a new tenant that will agree to pay the higher rent that you would like . but there is a risk that they may prove to be disruptive, destructive, poor/non payers and total pains.

    Personally I'd stick with the present tenant and consider small yearly increases in line with the cost of living.
    The best things in life aren't things

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  • silvergirl
    Good tenant, good landlord
    Yes, discuss this dilemma with the tenant. You can both put the case, and may be able to come to some agreement on how to manage your relationship. You sound as if neither is exploiting the other, keep on that track.

    A good tenant is golden, and I thoroughly support your interest in sustaining someone doing a valuable job which is low-paid. If you can do it, you are giving to society as well, in a quiet way, the best way.

    So, no, don't put the rent up if you can carry on as you are. let the tenant know they are valued both as a worker and a tenant. if you are a good landlord, they won't want to leave. And they might surprise you with an offer. A comfortable relationship is always better than turmoil, unless one is a diva, which I don't think you are.
    Just talk.
    • deborah007
    • By deborah007 8th Aug 12, 7:24 AM
    • 64 Posts
    • 493 Thanks
    a small rise
    I agree with other posts - a small rise would be appropriate but you could do this each year.

    Do you do regular maintenance and decoration? I lived in a rented flat for 7 years before buying a house 3 years ago. The flat was maintained ok - albeit repaired rather than replaced - and i was happy with the rent as the area suited me and the flat was ok, Other flats in the block had been modernised and the landlords were charging a much higher rent.

    Is your balance that you haven't updated kitchen, bathroom, carpets etc as other landlords may have done? If that is the case then you shouldn't charge the same rent.

    Talk to your tenant about this and see if he/she is happy to settle for a lack of up to date facilities for a lower rent?
    D x
  • sgtrock
    We were on the opposite side as tenants in a property that could have attracted a higher rent. However, we were good tenants and the owners acknowledged this and we were happy when they put the rent up by £10 every year on the anniversary, they always contacted us up first to see if this was okay, and of course it was. Check the other properties out and see about the turnover as one response has already indicated and just think that if they are good tenants you are not guaranteed to get good ones next time. Keep being a nice person and getting what you consider the best deal - good tenants and a steady income.
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