Do you have a long term tenant that you have no issues with?
If so you should seriously consider the impact that the increased rent could have on your tenant’s ability to pay. I have spoken to Landlords at various events and they have said to me that they would rather have someone that they have built up a rapport with paying slightly under the market price, but in the knowledge that they will pay the rent on time every month and will not have to then worry about void periods and the mortgage re payments.
So for example on a £1,000 let, you decide to increase this by 5% to potentially generate an additional income of £600.00 a year and the tenant is already stretched and decides to move on and subsequently you have to spend money on general wear and tear to attract a new tenants and also have to advertise the property, you could in fact be no better off.
If it took you a couple of weeks to get the property ready for a new tenant and a few weeks to get someone else in the property, this would mean in rent alone you have lost more than you would have gained in increasing the rent.
So if you are fortunate enough in this economic climate to have a good reliable tenant, my advice would be to think twice before increasing their rent.
The best time to look at you rental costs is when you current tenant decides to leave and by doing a Full Tenant Reference on any new tenant you can see if they can financially pay the rent going forward.
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