ASSESSING THE RENTAL VALUE OF YOUR PROPERTY
When reviewing rents and tenancy agreements the question often arises “Should the rent be increased and if so, by how much?”
When we review your rent, the first thing we do is determine the nature of the tenancy and then do a comparative market analysis to assess the rent the property may achieve in the current market. This is how the market rent will be determined when assessing the rental income for any property.
Many investors are reluctant to increase rents at properties where they have retained a good long standing tenant and although this is sometimes a good practice where vacancy rates are high and the rent has only marginally risen, it is important to refrain from consistently choosing this approach.
It is also important to move with the market as conditions do not always reflect increases in costs. When these costs occur, as income is not being maximised, the costs can have a negative effect on the performance of your investment.
If an investor is put in a position where they need to sell their property, having the rent at less than market value can have a negative impact on securing a sale at a reasonable price.