Increased vacancy is one of the biggest reasons why some landlords hold back from raising rent regularly. Yet tightening yields in the Auckland market
is pushing a lot of landlords to start questioning whether they are maximising their rental returns.
Unlike other types of investors, landlords do not have the luxury of playing a sheer numbers game. When we deal with residential tenancy, we are dealing
with people’s homes, there is an inevitable human element to the equation. That is not necessarily an impediment to a profitable investment. So in
today’s discussion about rent increases, lets turn this around and ask ourselves how can we make use of this human element in order to further
our investment goals?
Here are some tips for you to consider:
- Be realistic – Set a realistic level of expectation. No one ever respond to price increase with careless joviality so don’t expect your tenant
to write you a thank you note when you put rent up. Take their initial reaction with a grain of salt, after all you wouldn’t like it if the bank
puts your mortgage interest rate up. - Happy tenants don’t move – A rent increase is normally the last straw, rather than the sole reason, that pushes a tenant to give notice. Just
as you don’t want to rock the boat with a rent increase, your tenant is not likely to want to uproot his entire home for one single reason. If
your tenant is generally happy with the tenancy then he is more likely to stay irrespective of the rent increase. How do you keep your tenant happy?
Deal with maintenance and repair issues promptly, do not intrude on your tenant’s privacy, handle disputes and issues...
