How market forces can impact your rental return.

As a landlord, a rental return and increase is something you need to think

about as it comes time to offer your current tenants a lease renewal.

While it can be tempting to increase the weekly rent for your tenants, there are market forces you need to consider when you’re determining if it’s suitable to increase your rental price. Here are the factors you need to consider and eliminate when you weigh up whether to make a rent increase:

Specific Property Costs Don’t Count

If you’ve had to spend money on your property in recent months, this isn’t a strong reason to increase your rental prices. This is because property-specific costs don’t reflect the wider market, which is what creates the basis for raising prices in the first place.

Liveability

Next, consider how your specific house or unit is different from other properties in the area. How attractive is it to potential tenants? Does it have more space? Has it recently been renovated, compared to other buildings in the area?

These are also important questions to ask. If your place is better or worse than the competition, you’ll need to adjust your price accordingly.

Market Performance

Beyond vacancy rates, you should also take market performance into account as a market force when you’re making decisions. Do some research on the property’s suburb and surroundings. You’ll need to look at factors such as median rent, house price, and average rental yield.

Finally, when you decide to increase the laws have changed around when you can increase your tenant's rent. If you would like more information, please email me at rentals@mattborgrealestate.com.au.