When you need advice regarding the rental income that you can earn from your property, it is crucial that your property manager is capable of providing you with reliable advice.
It is important to keep abreast of current market trends and understand what factors are affecting the market. Your property manager is in the best position to advise you about what is considered as the appropriate asking rent. It would be best if you set a schedule as to when to assess the appropriate rental rates. First, it should be done when securing the management of a vacant property. The next is each time there is a renewal of tenancy.
As a landlord, it is important that you keep track of the rise and fall of the rental market. It is your responsibility as a landlord to be aware of the importance of being responsive to the market – if you want to keep attracting tenants and avoid prolonging vacancies, that is.
Restrictions to Rent Increases
Should you decide to have a rent increase during a tenancy, you must provide your tenant with a written notice at least 2 months before the increase takes effect. For fixed term tenancies, the details of the increase must be included in the original signed tenancy agreement where the amount of the increase must be indicated and the date it will commence. If there is no provision contained in the fixed term tenancy agreement, then any increase in rent cannot be imposed sooner than the end of the fixed term.
On the other hand, if the rent is being increased going from one agreement to another, then the 2 months notice is not required by the Act. Then again, providing prior warning to the tenant is still deemed best practice. The tenant will have to sign a new agreement and pay a higher rent for the said tenancy period. Under section 93 of the RTRA, however, during the tenancy or as the tenant enters into a new agreement, an increase in rent cannot be set more frequently than 6 monthly.
How much can rent increase by?
There is no particular method dictated by law regarding restrictions pertaining to calculating the rise and fall of rent. The need to increase or decrease the rent generally depends on the market supply and demand.
Should the tenant feel that the rent increase is unreasonable, they can apply for an order to the Tribunal. The Tribunal will then decide whether the rent increase is acceptable based on the aspects stipulated in section 92 of the RTRA Act, and they are the following:
- The range of market rents usually charged for comparative premises;
- The proposed increased rent compared to the current rent;
- The state of repair of the premises;
- The term of the tenancy;
- The period since the last rent increase [if any];
- Anything else the tribunal considers relevant.
Ways to reduce vacancy rates
Whilst your property manager is your best option when seeking advice in establishing the right rental price, they can also come in handy with a lot of other things. Other considerations are as follows:
This applies to situations where the rent includes gardening, house or pool cleaning. It can be a valuable arrangement, especially to tenants who do not have the time to do those things themselves. You can also include water, or perhaps install solar panels. Maybe wire it up to NBN or Foxtel where they can readily connect at their cost. There are lots of ways to make your property seem like a cut above the rest.
Bank on the property’s appeal
The number – and quality – of applicants greatly depend on the overall presentation of your property. And when I say ‘overall’, it means the look, the condition, the style, and even the smell of your property.
It is important to understand the demographic of tenant that your property is likely to attract or that you want your property to appeal attract. Your property manager should be able to advise the landlords on what they can do to further enhance the property’s appeal.
Step up your marketing plan
People nowadays respond better with visuals. So when marketing your property, your best bet would be to showcase it in the most attractive way possible. Perhaps you can try hiring the services of a professional photographer. Images taken by a professional guarantee that the property is shown in its most flattering look, giving it a greater chance of faring well in a competitive market.