Property managers who win tenancies with rent reductions could instead spend the same amount of money to earn rent increases.
Express Rental Management property manager Terence Pethybridge said he is always surprised by the number of landlords who are scared to increase rent in line with Consumer Price Index rises.
“I have met many owners who are so fearful of losing a tenant they even offer discounts,” Mr Pethybridge said. “While kind-hearted, this is short-sighted and ultimately negative, unprofessional behaviour.”
He said there is no sense in watching a property age as the rental return also lessens.
“Instead of losing $10 per week in rent, or offering a week’s free rent, why not regularly offer tenants some extras as a thank-you for their loyalty and for taking good care of a property?”
Mr Pethybridge said by using a $500 annual budget as a guide, the following can be achieved:
- A new dishwasher
- The installation of two new ceiling fans
- A free carpet steam clean (less than $150)
- A free house clean (around $400)
- Two or three new blinds for the bedroom windows
- New tapware for the bathroom, kitchen, or both
- New toilet seats (around $30 each)
- A free external pressure wash (around $250)
- Some touch-up professional painting to the value of $500
Mr Pethybridge said landlords can also combine two or three of these ideas and spread them over an 18-month period.
“Result – the tenant sees that their landlord is helping them to live more comfortably,” he said.
“In such circumstances, a tenant will rarely object to their rent rising by 2 per cent to 3 per cent per year, in line with CPI increases.”
Mr Pethybridge said even if the worst occurs and the tenant objects and decides to move on, the landlord’s investment has been well cared for and it should assist in finding a new tenant sooner.
This blog post originally appeared as '9 things you can do to increase your rent' on Smart Property Investment.