Increase in Rent, How much is fair?

C

CKT

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I need to increase the rent I am charging. He currently pays €740 am for a modern 2 bed house in the middle of town, it has a big back garden and off road parking, on a quite street.

He is in the house a year now. And he is the perfect tenant. I was thinking of increasing the rent to €780.

Do you think this is fair?
 
Well 5.4% is approximately in line with CPI inflation but that is not the only arbiter here I suppose.
 
Sounds like a fair rise, but that would depend on what the going rate is in your area. Is the tenant likely to find an alternative for better money.
 
It would probably be around the going rate. The tenant has said that he really likes it there. I suppose if it was too high we can negotiate !!
 
A quick check on DAFT shows that to be about right in terms of the market rate.
 
If the proprties around this area are getting the same then it's fair.
 
If as you say "he is the perfect tenant", I would'nt be in any rush to increase rent at all as "perfect tenants" are hard to find. I would sooner have my tenant stay longterm rather that having bigger rental income but the house vacant for a month every year or so due to a change of tenants.
 
Hi

I would agree with NHG. 12X 40 =480 which is approx 3 weeks rent. Compare this with maybe having to get new tenant and the empty period. Hardly worth the hassle. And if you are paying tax on the money, then its definitely not worth the hassle.
 
If the tenant is happy and the rent increase is fair, market or just under it, why would he move?

I'm sure he would expect the rent to increase at some stage.
 
To be honest this perfect tenants are few and far between is a little over used and often wide of the mark. All you need from a tenant is for the property to be reasonably cared for and for rent payments to be punctual. The chances of both of these happening are heigthened through good management of the properties. I would say, tell tenant that you are going to be increasing the rent to the market price, but you could agree to meet half way should he be overly put out by this. If he gets in a huff and decides to take off then he isn't the perfect tenant at all.
 
...........or he's a 'perfect tenant' when his needs and budget are fulfilled at the present rent, and a 'past-tenant-now-renting-elsewhere' when the rent increases? Strategy here surely also depends on how many voids there are locally. Is there pressure on rentals in Dundalk? You could check this out on Daft.ie. 'Market price' is a combination of demand and how potential buyers evaluate the goods!
 
increase by 20 - thats enough in my opinion. Increase the rent each year by a small amount for an existing tenant. When the tenancy changes adjust to market rate if your rent has fallen behind. some landlords only increase every few years and then make a substantial jump which the tenant finds hard to adjust to. Hope that helps.
 
I've been looking at renting a property since the New year. Looked at a few houses in Dundalk and Drogheda as I'm beginning work in Swords next month. There's plenty of availability in Dundalk, in and about the €750 range, but even i'm thinking that is too much. Its a renters market now as there is so many houses and apartments available. An empty house costs the owner money in the long run. I've told a few landlords and management people I might be interested if the price came down, so still waiting on replies.
If your happy with your perfect tenant I'd leave well alone, what would you do if he asked for a rent reduction instead of your rent increase.
 
If your happy with your perfect tenant I'd leave well alone, what would you do if he asked for a rent reduction instead of your rent increase.
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Hand him his notice and move on perhaps
 
MrMan said:
Hand him his notice and move on perhaps
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As an estate agent MrMan I would have thought you of all people would know that this would be illegal. The Residential Tenancies Act 2004 states that the rent must be set at the "market rate". If the market rate is below what the tenant currently pays then they are within their rights to ask for (and expect) it to be reduced. This is something that will become more of a concern as the number of rental properties increases since a softening in the market rate can affect all tenancies; both existing and new ones. Terrible legislation if you ask me, but that is what we currently have in place.
 
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