Newspaper article The Chronicle (Toowoomba, Australia)

Raise the Rent or Keep the Tenant?

Newspaper article The Chronicle (Toowoomba, Australia)

Raise the Rent or Keep the Tenant?

Article excerpt

Byline: Lisa Herbertson

WHILE your property investment may look great on paper, things can quickly turn on their head if you're faced with a tenant thinking about vacating because they're being faced with a rental increase.

Director and Founder of BuySide Buyers Agency Josh Masters said there are a number of factors to consider when faced with this dilemma.

Is the rental market strong at the moment?

"While we may like to stick to our guns and feel that we're justified in increasing the rental amount, if there are a hundred properties on the market just like yours and demand is low then the chances of you scoring a new tenant at a higher rent could be difficult," Mr Masters said.

"Have a chat with your property manager to get their view on whether the property would rent out at the desired price.

"While a modest increase may not seem like much, if the tenant looks around and can secure a similar property for less than they're paying now then they may feel that extra saving is worth the move."

Is the current rent below market value?

"While it's always important to check with the property manager to get the latest market insights, you may have bought into an investment that is being rented out far below market value," Mr Masters said.

"Even in a tough rental market, increasing the rent could still mean that the higher rent is still quite competitive.

"If the tenant is keen to stay on they will also be weighing up their options.

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"And if they want to stay in the area, they will understand that they may not secure another property at such a cheap rate.

"Add the cost of moving and the inconvenience associated, and it's often more affordable for the tenant to wear the increase and stay where they are."

Is the tenant worth keeping? …

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