When To Increase The Amount You Charge for Rent
Related Form: Rent Increase Notice Template.
Think you’re not charging the right amount?
The life of a landlord can be very difficult. They are required to collect rent, issue warnings if necessary, and possibly collect money for bills. In addition, it is the landlord’s responsibility to let the right kind of people to rent their property. The landlord is the one who is ultimately responsible for vandalism and ill treatment to any home. Deposits are meant to cover costs for damage – but often, they do not.
Landlords are constantly left penniless after renting a property out. The standard cost of monthly rent does not even begin to cover the cost of the mortgage the landlord had to pay in the first place! And, in the instance of a house share, landlords are the ones who are left to pick up the pieces when tenants are unable to make ends meet.
Considering all a landlord has to go through, are you really charging enough rent when you let out a home?
When to increase the amount you charge for rent
It can be particularly hard to decide when you should raise the rent on a property when you are not the type to be on top of the real estate market. The truth of the matter is that many landlords are regular, family-orientated people who rent out their spare property in order to make a few extra bucks. Therefore they mightn’t be sure when, how, if and why they should even raise a property’s rent. By considering these two particular headings, however, you’re bound to have a better understanding.
1. Location: Where is your property located? Is it located in the centre of a busy city, or in the suburbs of a city? Is it located in the countryside of a quiet, rural town, or is it in the centre of a rural location? You need to carefully consider where your property is located before you can come up with a reasonable price to rent it off at. In general, properties located in the city have higher rents than properties located in the countryside. This is because there is more demand for properties in the city as they are nearer to popular amenities and work places. If your property is in the countryside, and you are charging high rent, you may want to reconsider. If, however, you own a property in a busy and vibrant city and your rent is lower than the average, perhaps it is time to increase the amount you charge for rent. Also, bear in mind that more posh areas go for higher rent.
2. Economy: Take a close look at the economy in your particular country, in your particular region. How is business doing? How is real estate doing near you? If you grimace at the thought of your particular economy, now is the time to lower your rent. If, however, a new booming business has just opened in your location, now is a perfect time to increase the amount you charge for rent. This is because a popular new business opening in any location is a good indication to how the economy is looking. It’s as simple as this – a bad economy means you cannot get away with charging high rent, a good economy means you can get away with charging high rent. If business is booming near you, now is the time to increase the amount you charge for rent.
Sense of loyalty when increasing the amount you charge for rent
It is advised that you never rent out a property to your close friends and/or family. The relationship between a landlord and a tenant should be entirely professional. Involving your personal life with your professional life is bound to go sour eventually. This is because when you rent out property to your friends or family, you develop a sense of loyalty. This means that you accept constant excuses about being unable to pay rent in time, and your finances suffer as a direct consequence. Are you renting out your property to someone you know personally? If it is possible, you are advised to end this contract as soon as possible. We are all guilty of making excuses when dealing with loved ones, but making excuses for a property will ultimately mean a severe loss in finances. In order to successfully increase the amount you are charging for rent when necessary, avoid renting out your property to someone involved in your personal life. Keep your real estate matters entirely professional!