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How To Become A Landlord - Articles

Sending a rent increase letter

Date: 12/01/2014

sending a rent increase letterSending a rent increase letter

Nobody wants to be the bad guy. But sometimes owning rental property requires you to raise rental prices to stay profitable.

Responding to the market is key, so chances are you will have to increase prices in the middle of a long tenure, meaning you will have to inform your loyal tenants, that the rental amount they’ve grown accustomed to paying – is going to increase.

This can be achieved without any major dramas – often tenants are aware of the state of the market and will respond amicably to a reasonable letter.

However, this is not always the case and even if they understand your reasoning, it does not mean that they will not move out.

The cost of losing your tenant must be factored into your cost-benefit analysis – if you have to do the whole marketing dance and any maintenance necessary to attract someone new, the increase should account for this.

It is vital that you go about raising the rent professionally and legally and do not cut any corners. Word of mouth remains an important referral process, no matter how broad your market may be.

Here are a few tips for sending out a rent increase letter:

1.    Know your stuff in case things go south. Familiarise yourself with your state tenancy laws and learn the extent of your rights.

2.    Give plenty of notice. No one will respond well to a sudden demand for more money.

3.    Be honest. Let your tenants know why you are raising the rent in specific terms. People feel valued when someone takes the time to explain a significant change such as rental prices.

4.    Let your tenant know how much you appreciate them by saying so, and maybe even offering a small renewal bonus with your rent increase letter, like a gift card.

Profile photo of Steve McKnight

By Steve McKnight

Steve McKnight, the founder of, is a respected property investing authority as well as Australia's #1 best-selling business author.


  1. aussieguy2000

    I have had tenants move out a couple of times due to rent increases, at the end of the day rents go up all the time and tenants have to expect a reasonable increase every so often. Here are some tips I have picked up first hand:

    1. when warranted, increase the rent regularly, by small amounts, if your tenant gets a $10-15 increase every 6 months its not going to bother them as much as getting smashed with a $30-45 increase after 18 months. Make sure your PM increase rents by the correct amount when prices have increased regularly so you don't have to do a catch up big sum later.

    2. When a rental increase is due, look at what can be improved or needs attention on the property. Has the tenant been complaining that the oven doesn't work properly, that the hot water system is old and unreliable, the side gate doesn't work efficiently, or the garage door gets stuck. Fixing something minor, means the tenant sees they are getting more for their buck, and a tradesman coming around to fix this issue the week before the letter to increase rent, they will be happier to accept it as the house has had an improvement. Also, when you know of non-urgent matters, try to keep them for that time, if the side gate needs to be replaced in the next 12 months, leave it until just before the rental increase, though remember things that cost under $300 per owner ($600 for a couple) can be claimed immediately so would best be done in Apr – June not July – Oct, so decide whether the immediate tax reduction or tenant satisfaction is worth more.

  2. duckster

    I have to increase my rent as the council rates went up 25% this year and I am being slugged twice for the fire service levy in my Council Rates and in my  landlord insurance.  Then my water rates I wil have to pay for a desalination plant at Wonthagi Victoria for the next 30 years. So I have some good reasons already not including the property value has increased. I toohave  lost a tenant but it was because I did not increase the rent over a number of years and when i asked for a $5 increase the tenant abandoned my property. So now I always make regular yearly increases.

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