Tenants always think their rent is too high and of
course, landlords want to take to maximise their investment returns.
The problem is you just cannot increase the rent whenever you want to.
Again, there is legislation about the timing of
rental increases across the country, but generally speaking, if a tenant is on
a periodic lease the rent can be increased once every six months, after giving
two months’ notice to the tenant.
If the tenant is on a fixed-term tenancy, such as a
12-month lease, then the rent cannot be increased until the end of that
tenancy.
If tenants find the proposed rental increase unreasonable,
they can challenge it and have a state government inspector assess its
fairness.
It’s important that landlords consider whether a
higher rent will be more beneficial than having tenants stay in their property
for longer.
Changing tenancies is time-consuming and has
additional costs attached such as loss of rent during the vacancy, reletting
fees and marketing charges – the total of which could be more than the proposed
extra rent would bring over six months or a year.
With this in mind, landlords should consider
whether an extra $5 or $10 per week will make a big enough difference to their
bottom line.
This is especially important during times when
rental supply exceeds demand so tenants have much more choice and may decide to
simply move somewhere cheaper.
It may be more prudent to wait another six or 12
months before increasing the rent in such a circumstance.
Extended periods of vacancies are not what any
landlord wants for their investment property so always keep in mind that
long-term tenants who pay their rent on time and look after your property well
are really the type of people that you want.
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Jason Gwerder
Friday, 19 February 2021
