Should I increase rent to protect value in case rent pressure comes to town?

[DarraghL]

Hi All,

I have an apartment that I have rented out for the past 30months to the same tenants. Initally they signed a 12 month lease and then it went from month to month. The tenants are good people and I really dont want to put the rent up even thou the rent is below market value. Currently it is not in a rent pressure zone. I am an accidental landlord and want to sell up once the finances allow. My fear is that my area will become a rent pressure zone and if I then wish to sell the apartment with the rent at well below the market value then this will affect the value of the apartment. i.e. any potential buyers will be restricted from increasing the rent from the low value I was charging - hence affecting rental yields and utimately how much they are prepared to value the property at.

If I go to sell will the current rent to important in the selling process especially if in rental pressure zone? So I am thinking that I should increase by a certain amount to protect the value of the property in the event of my area falling under a rent pressure zone. Does this make sense?

If I wish to increase the rent what steps do I require to take (I have a check list below but I may be missing some steps)

1. Give 90 days written notice to Tenants
2. Written notice must be in a specific format showing other properties in area at same or less rent etc
3. Sign addendum to inital lease
4. Inform RTB of increase

Thank you and appreciate the advise.

 

[SqueezedMiddle]

There are many landlords, including myself who wish they had charged market rates and are now stuck and just wishing they were out of the business.
My advice nowadays is always make sure you are charging at least market rent.

 

[Sarenco]

I strongly agree with SqueezedMiddle - the new rental control rules have seriously punished landlords in rent control zones that charged below market rents.

The RTB website contains sample notices and a pretty clear description of the requirements.

 

[Firefly]

Let's say the difference between current rent and market rates is 150pm. Could you draw up a new contract at the market rate but then deduct 150pm from this as a service the tenent would undertake to maintain the property - cut the grass for example? If/when the tenants leave you could simply omit this from the next lease and charge the market rate. Absolutely no legal knowledge but perhaps some of the legal minds here could advise?