Tips on raising the rent in my property

Zascar

I have a small apartment in a small town that has been rented out for many years. Before the crash I was getting 600pm but when it was empty i had to lower it to €440pm and it's been like that for many years with the same tennant. Now i learn other apartments in the same complex are going for €600pm once again which is great news.

I have to top up the mortgage by €200 each month so I really need to raise the rent now to get some of it back. However, I really don't want to lose the tenant. If he moves out I'll have to spend money on the place and it will be empty for a while, plus all the hassle getting it fixed and rented again. It's also 2 hours from where I live.

I'm thinking of asking for €550pm as I'll be happy with that - and it's a 22% increase. Can anyone give me tips on how I communicate this to the tenant? Do I make it immediate or give one months notice? he pays his rent weekly.
Thanks

athtrasna

Under the new laws you need to give 90 days notice! Sounds like you have a lot of reading to do

http://www.citizensinformation.ie/en/housing/renting_a_home/rent_increases.html

Michael D Not Higgins

Apart from the correct notice, I'd add that you should have a chat with your tenant first. Let them know the market rate is 600 and that you'd like to give them a discount for being a good tenant. You can them come to a mutual agreement. It needn't be adversarial.

Kenjataimu

coa wrote: »

just wondering, if the rent changes to 550pm, how much would you charge per week?

Multiply by 12 (months), divide by 52 (weeks)

Zascar

Wow, thanks guys. I did not know that. Looks like I do have lots of reading to do - I have not paid attention to much of the rules of being a landlord lately.

I forgot that I can only raise the rent every 2 years now so that may change things.

_kookie

I'm about to raise the rent on one of my properties too. mainly because of the government tying.my hands and the reaction I see on boards etc from people when landlords finally decide to raise the rent after a long time.

People giving out that landlords are gouging, even if they haven't raised the rent for a number of years. It seems you get no thanks I. the end for keeping the rent below market rate. Only abuse when.tou finally decide to raise it anywhere near market rate. So best just raise it to market rate every two years regardless of anything else.

Zascar

Actually thinking about it now, I wonder if now is the right time to be raising the rent? It's been so low for so long and it has finally come back up, but should I wait if its going to continue to rise? If I can't raise the rent for 2 years, I don't want to raise it now if the rent keep rising. Looking on daft there are only 8 two bed apartments listed in the whole town. I spoke to a local property management company and they said they'd have it gone in a week. Maybe I'll try to find out more about the area and if the rents are likely to continue to rise in the near term.

This apartment has been killing me for years, over €200 a month to top up the mortgage, plus management fees, repairs, and then taxes. I would really love to try to minimise some of these expenses...

Michael D Not Higgins

How much is it realistically going to go up? At the current prices you gave, you're down 160 a month leaving it and waiting for more of an increase. If market rent is another tenner next month but you've lost 160 in the meantime you'll wait 16 months to recoup it.

Rent is funny too, is unlikely to go up until it's a round number, like 625, which might take 6 months, when you've lost 960 in the interval. That'll take 3 years to catch up.

Zascar

Very good point, you are right - thanks.

Zascar

Any tips on the wording of how I communicate this to my tenant?

newacc2015

Zascar wrote: »

Any tips on the wording of how I communicate this to my tenant?

I would call them and tell them that you are raising the rent. That they can expect a letter in the post in the next few days. I would personally send it registered, as I know of tenants saying they never got rent review letters.

One thing you can do which not everyone might agree on is stating a higher figure than you want while on the phonecall eg €650 when all you want is €550. So when they go to negotiate, they feel like they have got a discounted and more fair rent, when you got the rent you initially wanted. Tenants are people, they arent rational a lot of the time. Making them feel like they got a fairer increase will make it go down easier.

It is important to emphasis that the one of the main reasons for the hike is all your expenses. The fact you are now paying higher insurance, LPT, more taxes etc. Tenants are less hostile to rent increases when they realise in fact most of their rent is going to Revenue and not your back pocket. Also make it clear to them that the rent cant be increased for another 2 years after the hike

NB point to consider. The 90 days notice doesnt not include the first day ie if you give them a rent increase notice, skip the date you are writing the letter on and then add 90 days. If you fail to do so, your rent increase letter and any other formal process eg eviction is invalid.

4ensic15

newacc2015 wrote: »

I would call them and tell them that you are raising the rent. That they can expect a letter in the post in the next few days. I would personally send it registered, as I know of tenants saying they never got rent review letters.

One thing you can do which not everyone might agree on is stating a higher figure than you want while on the phonecall eg €650 when all you want is €550. So when they go to negotiate, they feel like they have got a discounted and more fair rent, when you got the rent you initially wanted. Tenants are people, they arent rational a lot of the time. Making them feel like they got a fairer increase will make it go down easier.

It is important to emphasis that the one of the main reasons for the hike is all your expenses. The fact you are now paying higher insurance, LPT, more taxes etc. Tenants are less hostile to rent increases when they realise in fact most of their rent is going to Revenue and not your back pocket. Also make it clear to them that the rent cant be increased for another 2 years after the hike

NB point to consider. The 90 days notice doesnt not include the first day ie if you give them a rent increase notice, skip the date you are writing the letter on and then add 90 days. If you fail to do so, your rent increase letter and any other formal process eg eviction is invalid.

This is most unwise. if you ask for a rent that is above market rent they may challenge it in the RTB and it will be very difficult and expensive for you to establish that the rent you have sought is at market level. Your own financial position is specifically excluded by law as being relevant in assessing rent.
You do not have to explain or apologise when reviewing rent. You are required to provide comparators for the tenant to demonstrate that the rent sought is
in line with market rent.

jimmycrackcorm

4ensic15 wrote:

This is most unwise. if you ask for a rent that is above market rent they may challenge it in the RTB and it will be very difficult and expensive for you to establish that the rent you have sought is at market level. Your own financial position is specifically excluded by law as being relevant in assessing rent. You do not have to explain or apologise when reviewing rent. You are required to provide comparators for the tenant to demonstrate that the rent sought is in line with market rent.

Why is it unwise when the tenant will either pay the new rent or query the figure?

4ensic15

jimmycrackcorm wrote: »

Why is it unwise when the tenant will either pay the new rent or query the figure?

The tenant may go to the RTB and they may disallow the increase.

davo10

4ensic15 wrote: »

The tenant may go to the RTB and they may disallow the increase.

There is absolutely nothing wrong or unwise about what newacc2015 posted. It really doesn't matter what is said on the phone and to be quite honest it seems like a good plan. The only thing that matters in relation to rent increases is whether the 2 year time limit has passed and the figure stated on the notice of increase. If the LL can show that this figure is in line with market rate then he/she is golden, what is said on the phone has no standing. If the rate is €600 and the op puts it up to €550 and correct procedure is followed, why is it unwise?

Ray Palmer

There is a lot to be said for being polite and friendly to everyone. There is also a lot to be said for being professional. Rent increases to match expenses is not a negotiation in a professional sense. Do not give explaining letters for rent increases other than it has been reviewed and you have come up with a new rate.

By explaining yourself people think it is all open for discussion which it isn't. A tenant does not care about your expenses and you do not have to explain how tax and expenses work. People don't ask a plumber to explain his costs or a shop to. Lots of problems with tenants are down to there not being clear demarcation on the relationship. You provide a service they pay for.

vandriver

Zascar wrote: »

Any tips on the wording of how I communicate this to my tenant?

http://www.prtb.ie/docs/default-source/notice-of-terminations-landlord-pdf/notice-of-new-rent-2.pdf?sfvrsn=2

appfry

I just googled images for "bed bug bites". Big mistake.

vandriver

Ray Palmer wrote: »

There is a lot to be said for being polite and friendly to everyone. There is also a lot to be said for being professional. Rent increases to match expenses is not a negotiation in a professional sense. Do not give explaining letters for rent increases other than it has been reviewed and you have come up with a new rate.

By explaining yourself people think it is all open for discussion which it isn't. A tenant does not care about your expenses and you do not have to explain how tax and expenses work. People don't ask a plumber to explain his costs or a shop to. Lots of problems with tenants are down to there not being clear demarcation on the relationship. You provide a service they pay for.

You need to give 3 comparable rents in the area

appfry

I just got notice of a rent increase to full market rate myself.
I'll try and negotiate. But I did nearly drive my last landlord to the wall demanding huge reductions and getting them a few years ago when it was a renters market and i felt no guilt, so I suppose i'll just have to take it this time. I'll get it back when its a renters market again I guess.