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Skyrocketing rents can increase profits, but landlords must balance fair pricing, tenant care and property maintenance to keep reliable tenants long-term.
While the rental shortages have spoiled landlords with tenants’ choice, the cost of living and rent have kept climbing, forcing renters to go out of their way to reduce their rental payment.
Cotality’s latest Rental Value Index showed that across the country, dwelling rents grew by 1.4 per cent in Q3, marking the largest increase since June 2024.
In total, over the 12 months to September, rent nationwide grew by 4.3 per cent, with Sydney and Brisbane being the most expensive cities for tenants.
The data showed that rental increase was linked to low housing supply, which stayed about 25 per cent below the five-year average, coupled with a record-low national vacancy rate of 1.47 per cent.
Rohit George, Managed chief operating officer, said that record-low vacancy rates across Australian cities have created a “landlord’s market”, letting investors be more selective in choosing tenants.
However, he warned investors to be mindful that higher rent could lead to additional costs, increased renter turnover and potential disputes.
“As rents keep climbing, so do other costs, and tenants start to feel the pinch. Some are stretching their budgets to stay put, while others are juggling multiple jobs or taking financial risks just to keep a roof over their heads,” George told REB.
“When that pressure builds up, it can lead to late payments, requests for rent relief, or in some cases, renters breaking their lease early.
“Those situations come with additional costs, cleaning, advertising, repairs and time without rent coming in.”
A Finder’s survey found that two in five Australian renters went above and beyond to reduce their rent in the last 12 months.
Data showed that 13 per cent of the surveyed chose to relocate to a cheaper rental or suburb.
Eight per cent said they moved in with a loved one to avoid paying rent, while 6 per cent have taken on a flatmate to lower their rental costs.
An additional 7 per cent borrowed from friends or family to cover rent, while 6 per cent secured a rental reduction, and another 6 per cent sought government housing assistance.
When a renter hits a rough patch, George said being flexible and maintaining clear, empathetic communication can save investors time and hassle compared to finding and preparing a new renter.
“It really comes down to keeping things fair and human, communication and empathy is key.”
“Sure, landlords need steady rent coming in, but hanging on to a good tenant is almost always better than trying to find a new one.”
“The reality is, finding a new renter usually costs more than working with a good one who’s going through a temporary setback.”
He said that when tenants request a short-term rent reduction or payment plan, investors should have an open discussion to find a middle ground that ensures consistent rent continues flowing.
“It’s worth remembering that empathy doesn’t mean you’re giving money away, it’s about protecting your investment.
“A renter who feels supported is far more likely to stick around, look after the property, and communicate early if things go sideways again.
“Keep it clear and in writing so everyone knows what’s been agreed to,” George said.
George said that during tougher times, landlords should ensure they charge a fair rent, and if an increase is necessary, have an upfront conversation with tenants about the amount and timing.
Additionally, he said landlords who proactively maintain their property will have higher tenant retention rates.
“Fix things quickly, stay in touch and make it easy for tenants to flag issues. Even small things like a minor upgrade, a clean paint job or a stable rent renewal can make a big difference.
“That kind of goodwill makes people want to stick around.
“At the end of the day, being a reasonable human usually makes for better business,” George added.
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