Recently popped mine up an additional $10 and that has gone well
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this will be there first rent increase since moving into property about twenty months ago, since then rates have gone up here, our insurance increased slightly and had to replace hot water cylinder, so i feel this small rise should not cause them to leave.
I make it a policy to keep any increases I make small but often, ie Residential Tenancies Act Section 24. This section is too long to post here, but it basically says (for those tenancies not subject to an annual rental adjustment ) that the notice of rental increase must -
a be in writing
b not less than 60 notice of rental increase
c not within 180 days of last increase.
I TRY to keep my rentals fairly close to the published DBH median for my area. You'd be surprised at how quickly rents can rise.
If you've not increased your rent for 20 months, your rent may be substantially below the lower quartile rent and the only way to increase that is by a big rent increase for current tenants - not always a good idea but necessary - or hope they leave and put rent up for new tenants. Now if the old tenants are paying below current market rent, why would they shift? They know they're on a good thing. Moving means they'll be paying more somewhere else.
The old tenants may complain that you're putting up the rent too often, but if you have a gentle conversation with them and show them a paper with the DBH rates on it, they'll be able to see the reasoning behind the increase.
At the end of the day, the tenants have the option of saying no to a rental increase and moving. If they do that, don't get hung up about it. It happens. Just do any necessary maintenance, then advertise for new tenants at the rate you choose and continue.
Remember, this is a business. Treat it that way.Patience is a virtue.
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Rent increase letter
Here's my version.
Dear John & Jane Blogs
RE: Notification of Rent Increase
This is to advise that your rent is increasing as from xxth xxxxxx 2010 to $XXXX per week. Whilst nobody likes rent increases, it should be noted that you have not had a rent increase since XXXXXX.
Residential Tenancies Act, Section 24(3)
The rent payable in respect of any tenancy may be increased by the landlord by notice in writing to the tenant specifying the amount of the increased rent and stating the day upon which the increased rent shall become payable, being a day not less than 60 days after the date on which the notice is given.
This rent increase will be effective for the rent due on xxth xxxxxx 2010. Please ensure that your automatic payments are altered in plenty of time for this to happen.Patience is a virtue.
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Originally posted by essence View PostI always look at the DBH website for their latest published figures. Remember these figures are based on ACTUAL Bonds lodged in the previous three months, SO YOU'RE ALWAYS working with old figures.
I make it a policy to keep any increases I make small but often, ie RTA Section 24 This section is too long to post here, but it basically says (for those tenancies not subject to an annual rental adjustment ) that the notice of rental increase must -
a be in writing
b not less than 60 notice of rental increase
c not within 180 days of last increase.
I TRY to keep my rentals fairly close to the published DBH median for my area. You'd be surprised at how quickly rents can rise.
If you've not increased your rent for 20 months, your rent may be substantially below the lower quartile rent and the only way to increase that is by a big rent increase for current tenants - not always a good idea but necessary - or hope they leave and put rent up for new tenants. Now if the old tenants are paying below current market rent, why would they shift? They know they're on a good thing. Moving means they'll be paying more somewhere else.
The old tenants may complain that you're putting up the rent too often, but if you have a gentle conversation with them and show them a paper with the DBH rates on it, they'll be able to see the reasoning behind the increase.
At the end of the day, the tenants have the option of saying no to a rental increase and moving. If they do that, don't get hung up about it. It happens. Just do any necessary maintenance, then advertise for new tenants at the rate you choose and continue.
Remember, this is a business. Treat it that way.
thanks for the advice, you are right, the rent we are charging is well below medium, think i can only blame myself and all the usual slackness that goes with me for that, didn't want to rock the boat etc, they are great tenents but i need to harden up, want to invest in more property so i need to get a bit realistic about it. cheers
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Originally posted by bellybutton View Postsince then rates have gone up here, our insurance increased slightly and had to replace hot water cyclinder
As I have mentioned elsewhere, I do a rent assesment annually. If the rent doesn't go up, I still send a letter saying that so they know that reviews are annual.
Incidentially, a year ago I didn't put the rent up on 1 property thinking the market hadn't risen. Now it has fallen behind market and wish I had done $5, as they have had a $15 increase this year.
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Originally posted by Asphalt View Postgeez mate, these aint reasons for an increase!
You would've had to pay this regardless! Watta joke,....get real!
No but as i also stated there has not been a rent increase on the property for at least 20 months and looking at statistic we are charging well below medium for similar properties in similar areas, so taking everything into account we feel its time for us to become more proactive, professional landlords.
Cheers for your kind comments.
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In my experience in NZ, we (landlords that is) as a collective tend to be guilty of undervaluing our product and service. This has the obvious and resounding effect of suppressing average rents which we then use as the guideline for setting new rents, yet further compounding our initial mistake.
I wonder if most of us will take a more pragmatic approach when the probable changes to depreciation hit home!!!
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