Refurbish house, increase rent?

[paperclip]

Hi.. I own a property with a mate that I'm renting to a couple of tenants. It's in a very good location and we've never had a problem renting it in the past.

We've had to drop the rent significantly in the past 2 years, we've always kept it bellow the average, prefering happy long term tenants.

At the moment, we're way bellow the average, 380 for a double, which we're renting at 300.

The main reason for this is that the house could do with a refurbishment... it's not in a complete state, but it could be improved... new carpets, couch, lick of paint etc...

I think it's only fair that we increase the rent if we make these improvements... but still keep it under the average, increase to 330 or 340.

What do you think is the best way to handle this? Let them know in advance what's happening, or just refurbish first, wait, and then increase the rent?

Or maybe even ask them, if they're happy with the current situation...

I'd appriciate any input, cheers.

 

[fizzelina]

if you have tenants currently who are happy where they are and not requesting the refurbishment then I personally would leave it for now and wait down the line to get the new carpets and furniture perhaps when they leave and you are re-advertise at a higher price. But for a lick of paint you should do that, it can really spruce up a place and of course you can't charge extra rent just for the paint being done.

 

[ariidae]

Disclosure first - I am writing from a tenant's point of view.

I choose to rent a property based on location first and the condition of the property second. If it is a smartly done up place I will pay more, respect the place more (maintaining the place like my own so you don't have to) and I will stay longer.

Your current tenants probably have a lease in place with you for a pre-agreed rental amount so you will have to wait until renewal to adjust rents. At this point what will happen will depend on market forces.

Prior to the lease end date, ask them if they are renewing. If they want to stay on, advise them then that you want to do up the place so you'll be putting up the rent. They may agree, haggle or decide to move on.

If they do not want to renew with you then refurbish it and advertise it at the new rental price with "newly refurbished" in the ad. Again the market will decide what price people are willing to pay. If you are getting too many calls then perhaps you should increase it further. Too few, then lower it a bit.

 

[paperclip]

Thanks for the feedback guys... tbh, we've never used a lease... and we've been renting it for close on 6 years, without any trouble.

I rented myself for 7 years, and never used a lease... I understand how these can be both a pro and a con.

 

[Bronte]

What do you think is the best way to handle this? just refurbish first, wait, and then increase the rent?

I can't believe a landlord would even ask this question.

Apart from that why on earth would you interfere with a steady rent and happy tenants.