Why Landlords Should Be Assessing & Giving Regular Rent Reviews
Sometimes, we hear landlords say, ‘times are tough, I don’t want to increase my tenants rent’. Although this may be considered an act of kindness to the tenant at the time, we know that this gesture can also have negative consequences for both parties.
The most important fact to take into consideration, is – remembering this is your investment, you bought the property to achieve financial goals, so it’s important you are maximising its performance. This may mean optimising the cash return on your investment, or simply maximising the cashflow so you can more easily cover the costs of keeping your property well-maintained. A well-maintained property will enhance its capital value.
At Point Property we have some of the best landlords in the country and we want to help you to continue to preserve the value of your investment. Some thoughts to keep in mind:
- Annual rent reviews help landlords keep up with market rents. Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay, for a tenancy. It needs to be similar to the rent charged for similar properties, in similar areas. At Point Property, when we review your tenants’ rent for an increase, we conduct a comparable assessment, and only ever increase rents to market level – never above.
- By increasing your rental annually, this will assist you in the affordability of completing maintenance and upgrades. This will allow you to improve the quality of life for your tenant and increase the length of tenancy.
- Optimising cashflow from rents not only helps with maintenance affordability, but in attending to maintenance regularly, you avoid the unnecessary and excessive costs due to delayed maintenance.
- Annual rent reviews can help tenants adjust to the market rent gradually and plan their budget accordingly. If landlords do not review their rent regularly, they may need to increase it significantly at some point, which can cause financial hardship or resentment for tenants. This can also result in tenants vacating.
- Annual rent reviews can also prevent disputes or complaints from tenants or landlords about the rent increases being too significant.
- Annual rent reviews can maintain a good relationship between landlords and tenants based on trust and transparency. At Point Property we ensure that we communicate with tenants correctly on your behalf about rent increases and give them at least the required 60 days’ written notice, which tenants usually will give feedback if they feel the rent increase is not justified, or unaffordable.