We have been considering a substantial increase in rent in order to bring a property up to market value.
However, after careful consideration, we have come to the conclusion that this might not be the best course of action. While a substantial increase in rent would bring in more revenue, it would also risk losing the tenant, who has been a reliable and responsible renter. Furthermore, if the tenant does leave, we would have to make costly repairs in order to get a market rent.
Therefore, we believe it would be more beneficial to do a modest increase in rent in order to keep the tenant. This would ensure that we continue to receive rental income, and avoid the costs associated with finding a new tenant and making repairs.
We understand that this might not be the outcome our clients are hoping for, but we believe it is the best course of action for the property.
Here are other few reasons why we may give a reasonable rent increase:
To keep up with inflation: As the cost of living increases over time, it's not uncommon for landlords to adjust their rental rates to keep up with inflation. This allows them to maintain the profitability of their investment property and keep up with their own expenses.
To cover maintenance and repair costs: Over time, rental properties require maintenance and repairs, which can be costly. A reasonable rent increase may help landlords cover these costs and ensure that the property remains in good condition.
To stay competitive: In some markets, rental rates may be rising quickly due to increased demand for housing. Landlords may need to raise their rents in order to remain competitive and attract tenants.
To earn a fair return on investment: Landlords are in the business of making money, and a reasonable rent increase can help them earn a fair return on their investment. This may be particularly important for landlords who have taken out a mortgage on their rental property and need to generate enough rental income to cover their mortgage payments.
Overall, landlords may give a reasonable rent increase for a variety of reasons, but typically it is done in order to ensure that the rental property remains profitable and sustainable over time.
