After 5 years of renting our home to a friend, I have engaged a PM to undertake inspections in my absence. The inspection went smoothly and the PM estimated market rent of $490-520/week (it's currently $430). The rent was slightly below market at the start of the tenancy as my friend/tenant took on my cats and I didn't have a PM so it kept costs down and was a mutually beneficial arrangement, with regular communication if any issues arose.
The situation now is quite different with increased costs due to valuation > rates increase, maintenance (painting, front fence) and the bigger gap between market and actual rent. I need to increase the rent to cover increased costs but I don't want to lose my tenant (single working mum). She is a great tenant, looks after the house and there are absolutely no concerns about rent not being paid, damage, illegal activities, undesirables etc and with family and the children's father just around the corner, she has no intention of leaving the area (as pointed out by the PM, she also wouldn't be ale to get a 3 bedroom house for the same rent she's paying now).
I realise I've not done either of us a favour by only increasing the rent $30 in 5 years and now needing to catch up, so was wondering if the more experienced forum contributors had any feedback about how to address this (besides the increase letter with 60 days notice) and a reasonable increase ($ or %).
The situation now is quite different with increased costs due to valuation > rates increase, maintenance (painting, front fence) and the bigger gap between market and actual rent. I need to increase the rent to cover increased costs but I don't want to lose my tenant (single working mum). She is a great tenant, looks after the house and there are absolutely no concerns about rent not being paid, damage, illegal activities, undesirables etc and with family and the children's father just around the corner, she has no intention of leaving the area (as pointed out by the PM, she also wouldn't be ale to get a 3 bedroom house for the same rent she's paying now).
I realise I've not done either of us a favour by only increasing the rent $30 in 5 years and now needing to catch up, so was wondering if the more experienced forum contributors had any feedback about how to address this (besides the increase letter with 60 days notice) and a reasonable increase ($ or %).
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