Put the rent up?

[Baby Boomer]

My tenant has suggested that I put up her rent. It's been three years since the rent was last set. Have rents in Auckland changed much in that time? It's a one bedroom unit and quite lovely though a little old fashioned, we renewed the bathroom last year for her. She has been renting it for 10 yrs. Currently she pays $225 per wk. It's just off Marua Rd in Auckland.

[BusyLizzy]

3 years is a long time without a rent increase. I'm sure your rates, insurance and possibly mortgage interest has increased over that time. I'm a big believer in bumping your rent up every year, even if it's only $5, to keep in line with average market rents.

Check out this site for current market rental rates: http://www.dbh.govt.nz/market-rent?T...and&RegionId=2

If I assume that Marua Road is in Ellerslie (not 100% sure about this), then the median rent for a 1 b/r unit is $220 so you're probably not doing too bad. But check the stats for neighbouring areas as well. Also check out current listings on Trade Me to compare.

[Propoholic]

My tenant has suggested that I put up her rent. It's been three years since the rent was last set. Have rents in Auckland changed much in that time? It's a one bedroom unit and quite lovely though a little old fashioned, we renewed the bathroom last year for her. She has been renting it for 10 yrs. Currently she pays $225 per wk. It's just off Marua Rd in Auckland.

Thats Marua Rd, Ellerslie? Good area, without seeing the unit & assuming its fairly tidy then $300 pwk+. DBH stats say $292 pwk for upper quartile. Rents are fairly strong at moment.
Ive rented out a 1brm flat in Mt Albert @ $290 pwk for the last 3 years and that $ is now quite under the market.

I think BusyLizzy's $220 pwk med refers to a single room. DBH stats say $250 pwk for a median 1 brm flat.

[BusyLizzy]

You are correct, Prop. Thanks for that, and apologies to BabyBoomer. It's getting late... I shuold be going to bed!

BB - in that case, definitely put the rent up!! The fact that the tenant has been there for 10 years, is lovely, etc doesn't matter. You are still running a business, you are not a charity - and you still have expenses to cover. You are doing yourself a disservice. In all likelihood, your tenant knows that they would be paying much more elsewhere and that is why they are happy to stay.

Besides, if your tenant is asking for a rent increase, who are you to refuse?!

OK - off to bed now. Good night!

[Baby Boomer]

Thanks for the remarks. $10 increase per week will do it. I've only had role model landlords who have kept the rent down for a good tenant. When we had a business servicing flats for landlords and homeowners, we saw first hand what a bad tenant can do!
Horrors.

[Tan]

I'm a big believer in bumping your rent up every year, even if it's only $5, to keep in line with average market rents.

Me too. Your tenant is possibly feeling nervous about a large increase coming at some point in the future. My rents generally increase approx $10 (5ish%) per yer and I have had no complaints yet.

Make a note to look annually at the rent stats as shown, and also to look on trade me for comparable properties.

Also, check no maintenance needs to be done. Perhaps she is hinting at this, either way it pays to keep on top of it.

[Propoholic]

Thanks for the remarks. $10 increase per week will do it. I've only had role model landlords who have kept the rent down for a good tenant. When we had a business servicing flats for landlords and homeowners, we saw first hand what a bad tenant can do!
Horrors.

There's no relationship between market rents and bad tenants. There's nothing wrong giving a good/long term tenant a $10/pwk discount. If market rent is $300 pwk (and you charge $235 pwk), then you're giving tenant a $65 pwk saving?? That equates to $3380 pa, you may be able to repaint most of interior for that and then charge $330 pwk. You can put a nice bit of carpet through for $3380. A good tenant will stay for 5 - 10 years at $330 pwk - in Ellerslie.

I think I'm a role model landlord because I charge market rent, have rent increases once a year and tenants stay for 5+ years.

[NovInvestor]

For a two bedroom unit, $3380 can paint the inside walls, cupboards, doors you name it, PLUS new carpet.

In fact you can almost throw a new bench top on top of that too!

PS: Trades people do the work, not you.

[essence]

The tenant has obviously looked around and seen what else is available on the market, and got a shock. She doesn't want you to put the rent up by $60(? just guessing) in one lump sum. I don't believe that you can put the rent up that much with a sitting tenant, it's too much of a shock.

She'd rather you put the rent up a little and it would still be under market rents.

I suggest you talk to your tenant, advise her that you're done your research and acknowledge that the property is SERIOUSLY under-rented and that you're going to put the rent up by (say) $15/week. You must give her 60 Notice IN WRITING before the increase takes effect.

You are also entitled to put the rent up again 180 Days after the last increase. NOT BEFORE THAT DATE. You could potentially put the rent up again by another (say $15).

She will still be under-paying market rent by a substantial amount after these two increases.

If she decides to leave (which she won't btw!!) she will have to pay market rent somewhere else, so why would she move??

You're not a Social Service. You're in business.

If the tenant moves, then definitely put the rent up to market rates.

[speights boy]

Sorry for the thread creep....

If essence is correct ( and I think he probably is ) it would show the attitude that many have to spending / saving / budgeting.

If she realises BB is subsidising her rent she should adjust her budget and be putting an extra $40 pw into a separate account.

If, at the end of another year , she has 2,100 in the account she has a nice end of year bonus.

If BB puts the rent up, she has the cashflow to handle it.

Perhaps she is happier giving the money to BB than saving it herself.

[Orkibi]

She will still be under-paying market rent by a substantial amount after these two increases.

BB get a rental appraisal done and show it to her and ask her to pay $10-$15 bellow the Market rent.

you are obviously don't take it as a business as been under rented by that much it doesn't do you any favours.

if she is on Winz then she is not paying the rent anyway, so that's why she ask you to increase?

[BusyLizzy]

you are abusively don't take it as a business as been under rented by that much don't do you any favours.

A few typos here - but I suspect that should read as "You obviously don't treat is as a business and as it has been under-rented by so much, you aren't doing yourself any favours." Or similar.

[TheLiberalLeft]

Or similar.

[Orkibi]

Yes- having a hectic day but relay wanted to post a comment about this...

why be a landlord if not for the "Investment and cash flow"

[SwissKiwi]

My tenant has suggested that I put up her rent.

Where can I get tenants like this please?