The conditions and circumstances of the rental market change, so even the most big-hearted of landlords will want to increase the rent of their properties over time. You may also need to keep up with interest rates on mortgage payments, cover the costs of landlord’s insurance, or cope with the escalating costs of living or own a property that requires a high level of maintenance. Perhaps maintenance costs have risen and you’ve decided to bite the bullet and raise the rent. There are many reasons, but the question is, what’s the best way to go about it?
Before you do anything, ask yourself if you’d rather keep a good tenant and save yourself the hassle and expense of marketing your property, or if you’d rather be able to raise your rent yearly in line with inflation. If you decide on the latter, you’ll need to wait until the end of the fixed-term agreement that your tenant signed. Typically this lasts for six months or a year. You should be careful about signing an agreement that is longer than this, or you may find yourself unable to raise the rent for some time, consequently leaving you out of pocket. When it’s time for the tenant to sign a new contract you can inform them of the rent increase and ask them if they’d like to continue with the tenancy.
Remember that your tenant has rights too, and they’re likely to dispute the raise if they feel that it’s excessive, so don’t go overboard. If you can’t come to an agreement between you, the tenant can contct the Recognised Tenant’s Association’s (RTA) Dispute Resolution Service for help.
If you still can’t resolve the dispute then you can both apply to the small claims tribunal for a decision. This may end up costing more than the rent increase will bring you, so tread carefully and be willing to compromise. Approach your tenant with tact and respect, especially if they’ve been reliable and trouble free; a good tenant can be hard to find and you don’t want to end up regretting your decision.