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Good tenants are too good to lose
Wednesday, March 12, 2008
Landlords who raise their rents too high risk losing good long-term
tenants.
Following recent interest rate rises and in line with current low rental
vacancy rates, some landlords may be tempted to increase rents.
Rising interest rates are likely to be taken into consideration by
landlords when leases on their properties come up for renewal so it is
understandable that landlords may need to raise their rents to keep
pace with rising costs. However, financial considerations should be
balanced against the importance of keeping good tenants in a
property.
Unreasonably high rent increases may prompt the angry departure of
good long-term tenants, leaving empty rental properties generating no
income for weeks, it could turn out to be a very costly affair.
The message is simple: don�t take good tenants for granted.
A tenant who pays their rent on time and maintains your property is well
worth keeping. This doesn�t mean you should never raise the rent, but
think carefully if you are considering a significant increase. In some
cases it may be worthwhile �rewarding� good long-term tenants by
keeping rent rises to a minimum.
Given that it can take four to six weeks to re-let a rental property, you
need to weigh up the benefit of an annual rent increase against the
cost of losing a good tenant. The legal guidelines relating to when a
landlord can raise the rent and under what circumstances vary from
state to state, and landlords considering a rent rise should check with
their relevant rental tenancies authority.
When raising the rent, many landlords with long-term tenants often
forget to review the bond amount. In a scenario where a tenant has
lived in a property for a number of years with regular rent increases,
the bond that was lodged may eventually fall short of the requirement
for a certain number of weeks� worth of rent. If you are raising the
rent, make sure you also consider a �top up� of the bond amount. You
should check with your relevant state authority for guidelines on this.
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