Increase the Rent?

BoozyBabe

Ok, quick question:-

(& after reading the 'How much rent do you pay' thread, I'm going "oh my God!!")

I own a property that I currently rent out to a tenant.

Lets just say this property is in the border region.

It's in a quiet village (with all amenities in immediate reach), the village is 3 miles from the county town which has high employment.

It's a 3 bed terraced property, fully furnished, 1st let & in excellent condition.

I have 1 tenant, a non-national, renting the property alone.

The rent per month is €540 (excluding bills) I make a profit from this rent (i.e. it more than covers the mortgage)

The mortgage has since went up by €25 roughly, so I'm not making as much profit as I was. (but making a profit as well as getting my mortgage paid for me, all the same)

The 1year contract is up shortly & I know the tenant will be renewing for another year.

The tenant is very good, pays on time, keeps the property in good condition & informs me of all details regarding the property.
I would be more than happy to renew the contract.

Would you:- put the rent up for the new contract to reflect (closely) the increase in mortgage, or as it's a single, well behaved tenant & you're still making a profit, would you leave the rent as it currently is?

I have no decision made either way (but perhaps gearing slightly towards keeping it as it is, as I'm an oul softy), so would be interested in hearing your comments.


(The rent is cheap for this property in this area, but this is because I didn't want to rob the teant.)

Lex Luthor

BoozyBabe wrote:

Ok, quick question:-

(& after reading the 'How much rent do you pay' thread, I'm going "oh my God!!")

I own a property that I currently rent out to a tenant.

Lets just say this property is in the border region.

It's in a quiet village (with all amenities in immediate reach), the village is 3 miles from the county town which has high employment.

It's a 3 bed terraced property, fully furnished, 1st let & in excellent condition.

I have 1 tenant, a non-national, renting the property alone.

The rent per month is €540 (excluding bills) I make a profit from this rent (i.e. it more than covers the mortgage)

The mortgage has since went up by €25 roughly, so I'm not making as much profit as I was. (but making a profit as well as getting my mortgage paid for me, all the same)

The 1year contract is up shortly & I know the tenant will be renewing for another year.

The tenant is very good, pays on time, keeps the property in good condition & informs me of all details regarding the property.
I would be more than happy to renew the contract.

Would you:- put the rent up for the new contract to reflect (closely) the increase in mortgage, or as it's a single, well behaved tenant & you're still making a profit, would you leave the rent as it currently is?

I have no decision made either way (but perhaps gearing slightly towards keeping it as it is, as I'm an oul softy), so would be interested in hearing your comments.


(The rent is cheap for this property in this area, but this is because I didn't want to rob the teant.)

I'm in the same boat as you boozybabe although my mortgage repayments have probably increased by €60. I don't make a profit from my property currently.
For the sake of €25/month I wouldn't, but it's up to you.

MorningStar

If rents have not gone up in the area you can't really put it up logically. As rates will more likely go up again this year I would raise it a little economically. Best to suggest to them you will be increasing the rent a small amount to cover costs and see their reaction. Check the market also so you know if it would be fair. Bear in mind to register a new tenant has a cost also.

Victor

Theres a few ways to look at it:

Same tenant, no problems, keep the rent the same.

Increase the rent slightly to cover your extra costs.

Increase the rent slightly to cover your extra costs, but ask the tenant is there anything he wants / needs done.

Increase the rent to or near the current market rate.

Of course, please give the tenant plenty of notice.

I'm in the same boat as you boozybabe although my mortgage repayments have probably increased by €60. I don't make a profit from my property currently.

Are you saying interest plus expenses are greater than rent? Or are you saying interest plus capital repayment plus expenses are greater than rent?

Lex Luthor

Victor wrote:

Or are you saying interest plus capital repayment plus expenses are greater than rent?

Exactly...this is the first year renting so I had a lot of expense this year...

Even still, for the first 5-6yrs I can't see me making a profit, but I'm only sub'ing the difference to the tune of €100/month so its a cheap long term investment.

Supercell

I've been renting 16 years now, and in my third place, only one landlord raised the rent,and that was a lovely penthouse apartment in Kingscourt (Dublin City Centre) after I was there about 5 years, he sold it a year later (undoubtably making a small fortune in the process), i'd still be there otherwise.

I can only assume that a good tenent is worth their weight in gold to landlords/ladies.

Ask yourself :-

Is the rent always paid on time?
Is the tenent demanding - always asking for something done - eg everytime a lightbulb blows do they expect you to replace it ?
Are there other similar properties in the area?
How long would be the period between them leaving and another (unknown) tenent be?
Is it worth the risk for 25 odd euro per month?

Personally if it was my own property and I had a tenent that was reliable and respectful of the place i'd take the 25euro and consider it peice of mind insurance. From my own experience renting it seems most landlords/ladies feel the same.