All Topics / Help Needed! / How much to increase rent on IPs

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of soloinvestorsoloinvestor
    Join Date: 2006
    Post Count: 39

    I wondered how much everyone out there increases their IPs rent and how often. The current tenants have just finished their 12 mth lease and are now on periodic rental. They want to stay for a long time. The property is slightly under priced in the market rental, but the tenants are great and I want them to stay and be happy. Either way – is it accepted that rent should increase annually – or do a lot of you leave rent increases as a last resort, or only do it when the property is vacant?

    I rent privately with no agent so I have to make this decision myself.

    Is it better to have a nominal increase annually, or just review every couple of years or when the property is vacant?


    Profile photo of laughing Maxlaughing Max
    Join Date: 2006
    Post Count: 6


    With the IP I have the rents go up periodically on the advice from my property managers. It can be 6months or 12months depending on certain things such as improving your property to make the tennant more comfortable. Personally my properties tend to have the same tennants in them that I had when I purchased them and whilst I know I’m very fortunate I try to give them little thank yous at the end of each yr such as movie tickets, a box of chocolates etc.

    Good luck with your investments,

    Laughing Max

    Profile photo of truebluetrueblue
    Join Date: 2003
    Post Count: 142

    Like Carla I manage our own properties. Rent is increased every 6 months. The amounts vary depending on the market. I use the rental column as a guide but normally charges below market. With a good long term tenant, it’s worth your while to look after them as it benefits both parties.

    Profile photo of XeniaXenia
    Join Date: 2002
    Post Count: 1,231

    I would certainly keep rents within market values, not below!

    Xenia Ioannou-Mena
    Property Manager &
    Property Sales Consultant
    E: [email protected]
    M. 0412 437 582

    Profile photo of WylieWylie
    Join Date: 2004
    Post Count: 346

    I manager our IPs and judge how the market is doing at the time the lease is up. I have a twelve month lease nearly up and I plan to up the rent $10 per week. This brings it up to market value although I am sure I could get a little more if they leave. However, I will not increase more than $10 because any vacant period will mean a loss to us and it would cost the tenants more than the $520 extra ($10 per week x 52 weeks) for the next year to move, so I am fairly confident they will stay.

    Sometimes we renew leases with no increase, just depends on how the market is at the time, but things are moving up now, so we will do the same.


    Profile photo of crushercrusher
    Join Date: 2002
    Post Count: 186

    There is usually a supply and demand issue here. If the lease expires and there is a high demand at the time, it is likely that you will get more rent because the tenants will probably not want to move and try and get somewhere else, especially if they will just have to pay around the same rent anyway.

    If the tenants are moving out and new ones are moving in they will simply compare your IP against the competing IPs. If there is not much competition then the landlord has the upper hand (although there is a magic line which generally a tenant will not pay above for a certain area and type of IP).

    I prefer to raise rents frequently in small increments but on the advise of my property manager I was able to get $30 more per week recently when my tenant moved out and a new one moved in. It went up this much in only 18 months. This big jump in rent is unusual and each area has different dynamics so it is best to do some good research before you make a decision.

    I also use the rental search engine at to keep up with what the current rents are in the areas I have IPs. Property managers sometimes have no idea what the current market rent is for your IP and they just want to keep the peace with the tenant so they might need some pursuading at times.

    Todd Burns

    Profile photo of tenorBbtenorBb
    Join Date: 2006
    Post Count: 27

    I tend to have the belief that, if a tenant is looking after my property for me, and they’ve already had 12 months in my property, I’ll reward them with a $50 voucher from a major chain at Xmas. This is currently applying to my first I.P, but seeing as the lease is up for renewal in September, I’ll seek feedback from my property manager regarding the current rental demand up there.
    Call me cautious but it’s better to have a happy tenant for 52 weeks than to have it vacant while you ‘hold out’ for an extra $20 a week.

    Profile photo of elkamelkam
    Join Date: 2006
    Post Count: 722

    Hello Landlords [smiling]

    I feel that the situation is different depending if it’s a rent review for existing tenants or setting the rent when the property is vacant. i.e for new tenants.

    If it’s for new tenants, then ask for whatever the market will bear . You can always accept less but it’s impossible to negotiate for more than you advertised.

    I confess to being cautious about rent increases for existing tenants. I never ask for 6 monthly increases as I know how I would feel if, as a tenant, I got a letter every 6 months asking for more money. [grrr]

    Even an increase after 12 months is dependent on market conditions and how much I want to keep these tenants and I never get greedy.

    I feel a $5 pw increase is not worth “upsetting” the tenants for and a $20 pw increase is pretty hefty so $10 or $15 is my usual increase in a reasonable market. I don’t ask for rent increases in a weak market.

    I use a PM so I always calculate how much the leasing fee, advertising costs etc. and vacancy period will cost if I get greedy and how long it will take me to recouperate this before I actually see a profit from the rent increase if the tenant leaves.

    Hope this helps

    Profile photo of HutchHutch
    Join Date: 2004
    Post Count: 137

    hi carla,

    I self manage a few of my IPs.
    As it turns out. I have just met with my tenants on the weeked past.

    They have been good to me and after 2 years, I put up their rent to $13 p/week. I gave them a bottle of red to thank them for being good tenants and they were in shock.

    As I was leaving they asked me; “Do you mind if we sign up to stay for another 12 months?”………Then I was in shock!
    (Bottle of red =$14. Rent rise =$676 p/a)

    PS: Happy tenants dont come along too often so I thought you would enjoy this.[biggrin]


    Profile photo of redwingredwing
    Join Date: 2003
    Post Count: 2,733

    I’d sign up for a year as well for $13 p/wk rent and a bottle of red[biggrin]


    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Online Positive Cashflow and Renovating Calculators

    Profile photo of AmandaBSAmandaBS
    Join Date: 2005
    Post Count: 549

    I asked Steve this very question during the Brisbane Property Masterclass and he replied that all good tenants should be on at least a 1 year lease. He further stated that an increase depends on market conditions and demands, but its better to have small increases annualy than a big lump.
    Sounds fair to me.

    “It is better to be inconspicuously wealthy, than to be ostentatiously poor…”

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