If you rent out an investment property, you must periodically consider raising the rent. Now that the Australian housing market is in flux with interest rates on the rise, the previous rental income you were making might not keep up with your mortgage repayments.
However, the equation isn’t always as simple as it sounds. With good quality tenants making your life as a property investor so much easier, you must consider whether upping the rent is actually the best thing for your situation. Reflect on the following concerns before making your decision.
The quality of your tenant
You shouldn’t underestimate the value of having high-quality tenants already established in your home. If you know these people are looking after the property well and don’t give you much to stress about, an unexpected rent rise risks them seeking a new place.
Naturally, this means you must search for new tenants that are not only willing to pay more rent but also have a similar easy-going personality. Depending on your situation, the trade-off to make this happen might not always work out in your favour.
The stress of finding someone new
Finding a new tenant for your investment property can be a stressful experience. You must make your home suitable for tenants, spend time and energy advertising your home, and then assess dozens of applications to find the right person.
For some homeowners, going through this process to earn a little extra in rental income won’t make sense. However, if you’re struggling to stay on top of your mortgage, raising the rent should understandably be your primary concern.
The state of the local market
When it’s time to consider raising the rent, you must consider the state of the local market. If you live in an area with many vacancies, setting the rent above the typical rate could cause your current tenant to find somewhere new.
However, in a market with fewer homes to rent, you might find that people are more willing to pay a higher rate for the right property. With the state of the rental market constantly changing, chat with our friendly property managers to get insightful advice on your situation.
Speak to the experts
Get in touch with the experts at InStyle Property Management to get knowledgeable advice about renting your home. Our highly experienced team will help you make the right decision regarding your investment property and tenants.