Date Posted: 01/11/23
Landlords often put off rent increases for fear of upsetting long-term tenants, but this approach could be costing them thousands of pounds in potential revenue.
In the current financial climate, it is essential for landlords to strike a balance between maintaining a strong tenant relationship and ensuring their rental income is in line with market rates.
Through professional negotiation and a fair rent assessment, landlords can increase their profits while still maintaining a positive relationship with their tenants.
The Cost of Delaying Rent Reviews
Many landlords avoid rent reviews and adjustments due to concerns over alienating loyal, long-term tenants.
However, landlords risk being significantly out of pocket by not keeping up with rental market trends and cost-of-living adjustments. The cumulative effect of not implementing regular rent increases can lead to a substantial loss in potential income.
The Rent Review Process
Landlords should engage in a transparent and professional rent review process to mitigate this risk. Begin by conducting a market rate comparison to determine if your current rent is in line with similar properties in the area.
Review your lease agreement terms to ensure you adhere to any rent review clauses or guidelines specified in the contract.
Tenant Negotiation and Fair Rent Assessment
Approach your tenant with a well-researched proposal for a rent increase, emphasizing the fairness of the assessment and its basis on market trends and cost-of-living adjustments.
By engaging in open and honest tenant negotiation, landlords can demonstrate their commitment to a fair rent assessment, increasing the likelihood that tenants will be receptive to the proposed changes.
Section 13 Notice (England and Wales)
If you are a landlord in England or Wales, ensure you follow the legal requirements by serving a Section 13 notice to your tenant, outlining the proposed rent increase and the date it will take effect. This formalises the process and ensures both parties are aware of their rights and obligations.
Conclusion
In conclusion, landlords need to review and adjust rent rates regularly to maximise their rental income while still providing a fair price for tenants.
By conducting a thorough rent review process, engaging in professional tenant negotiation, and adhering to legal requirements, landlords can strike a balance between increasing their profits and maintaining a positive relationship with their long-term tenants.
By doing so, both parties can enjoy the benefits of a fair and mutually beneficial rental agreement.
