- If you don't agree with your property manager in regards to a rent review, what to do?
- Ashleigh Goodchild provides some advice for landlords on how to move forward
- Start with local statistics, compare the property, and perhaps suggest a middle ground
So, your tenant’s lease is due to be renewed and you think the rent should increase more than what your property manager is suggesting.
What should you do?
- Ask your property manager for an up to date rental comparison report. We usually generate these through RP Data where we compare 10 similar properties in the local area that have been recently leased.
- Use the above numbers to work out an ‘average’ price for rental properties that have the same number of bedrooms and bathrooms, in the same area.
- Next, you want to determine if your investment property is above average or below average. ‘Above average’ might mean that it has a double garage, pool or recent renovations. ‘Below average’ may mean that the home is in its original condition. I would add $50 per week or drop $50 per week from the ‘average’ price to determine a fair price for your rental property.
- Now you know how much you would advertise the property for ‘if’ it was to be vacant. For a good existing tenant, most clients would meet halfway.
Let’s say you have a good tenant in a property paying $400 per week for an average property.
The calculations show that if they were to vacate the property you could advertise for $450 per week. You may consider meeting halfway and renewing the tenant’s lease for $425 per week.
Quite often, a good property manager will do this anyway, but if you are unable to agree to a fair rent, you may want to ask for this report so that you can take the emotion out of it and just focus on the local area statistics.