Now that the rental moratorium is no longer in place to prevent evictions and rent increases, Owners and Investors are now able to ask what they would be entitled to regarding a rent increase for their property.
While there is no question that the Perth rental market has taken a turn for the better and for Owners and Investors alike that have had to carry the burden of low rental returns for many years, this is great news!
On average rents have increased by 10-15% throughout WA and at Celsius we want to make sure we maximise the return on your investment in every way possible. In saying so, we thought we would cover some important things for you to consider when negotiating the rent for an existing tenancy or a vacant property.
The condition of your property
- Speak with your Property Manager about any minor upgrades / repairs that could be done around the property to give it a fresh look – the better a property presents, the better tenant you get and for a higher price.
The location of your property
- Properties that are close to the CBD or the coast generally attract higher prices. So, while the suburbs surrounding these areas have seen an increase as well, the percentage is likely not going to be the same. This is because they do not quite offer the same lifestyle as these high attraction suburbs.
Could you lose a good tenant?
- An existing Tenant does need to keep in mind that while a rent increase doesn’t seem like appreciation, they would likely be paying more than the increased amount offered to them if they were to move into a similar property in the same area. Plus, they would be in competition with many other prospective tenants. However, we generally advise our Owners to keep increases slightly below current market value to avoid losing an excellent Tenant. Even with rent increases on the rise, if your Tenant moves out because of a rent increase you would need to consider leasing fee costs and the cost of any vacancy period. Great tenants keep great investments.
- We always recommend that you seek the advice of a tax professional whenever your financial situation will change. Evan a small rent increase may not seem significant, but it can have an impact on your tax return, particularly if you are negatively geared.
Conduct a comparative market analysis
- Your Property Manager will be able to provide you with a CMA for your property. This report is a great tool to determine what rent you should be able to achieve for your property. Briefly it will show you what similar properties have leased for, days on market and any difference in features between each property.
If you would like to discuss the management of your investment property further or if you are looking to offer your property to the rental market, contact the Celsius Property Management team and we will be happy to assist!