To raise their rent every year?

[Fev11]

For various reasons I have recently started renting out a house and plan to keep doing this for a long time. The tenants have said they plan to stay for at least 10+ years if possible.

What is reasonable as far as future rents are concerned? If they were only planning to stay for e.g. 2 years, I would probably keep the rent the same, but 10 years is a long time so my gut feeling is to put something in place where it rises each year in line with inflation.

The tenants are great but I suppose I am doing this on a business footing. For any long-term renters and landlords out there, what do you do, or think is fair?

My parents had a very long term let. You save a lot of money by keeping them in so I would maintain the rent as low as possible for as long as possible.

No empty months - no council tax to pay during those months - no agents fees - less renovation, replacing carpets, repainting, cleaning, annoying tennants, people staying 6 months and dodging rent - no court hassles to remove them

Honestly - try not to put it up every year and see what you're saving! Advise them you will reassess the rent after Yr 2.

Treat them like princes!

I rent long term and I’m a good tenant (I hope) and if my landlord put the rent up every year I’d be out. Been here 4 years though and landlords never suggested it thankfully. I think every couple of years is fair game but every year just because they want to be long term tenants is a bit much espically if they’re looking after your home etc.

Good tenants are a worth their weight in gold. Good tenants with a reason to feel loyal, helpful and accomodating are even better. Voids, redecorations and tenant hunts are expensive and annoying, and are definitely not worth a few extra quid a month.

Ten years is a long time though. And they are likely to be ten turbulent years politically and economically. If borrowing costs or landlords' taxation rises steeply and the rental market will bear it, the balance might shift in favour of a hike. But I'd try to avoid it.

When we rented and had a landlord who automatically increased the rent we went elsewhere, rent hikes seem to come quickly when they're annual! And as the place was already not cheap it seemed unfair somehow. Then we had a place for 4 years, no rent hike as the LL said he appreciated what good tenants we were. So we stayed there longer than we prob would have, kept the place immaculate and facilitated repairs etc he wanted to do.
If there's good will on both side thats a good relationship. Put the rent up ££ automatically could actually cost you more in empty weeks/months and the cost of find new people.

The previous rental property I was in for 8 years. Landlord reviewed the price each year and adjusted accordingly to markets rates. It went up by 5% the first two years and then went down 5% the next two and stayed the same until we left. I wasn't bothered by the rise because he was a fair and reasonable landlord and we had paid no deposit. Even better when the rent came back down again.

We don't automatically raise rent yearly, but we have something in the contract to say it will be reviewed. Inflation is low at the moment, but it could rise and then you could be in a situation where the cost of living and mortgages have risen dramatically and the rent is not covering your outgoings.

My sister rents and her rent does go up every couple of years (we are in a London suburb though).

I don’t think anyone can simply tell you not to raise the rent or to raise it, it will depend on external factors like whether the interest rate on your mortgage has increased, whether you’ve had to make expensive changes to the house (new boiler etc) and also whether rent is in line with other properties in the area.

This is just a layman’s view, I’ve never been a LL (but I have been a tenant).

When we rented and had a landlord who automatically increased the rent we went elsewhere, rent hikes seem to come quickly when they're annual!

I'd also be worried that a landlord like this is operating on a shoestring and is likely to cut corners and pinch pennies elsewhere.

I wouldn’t leave the rent unadjusted for ten years. I’d review around every 3-4 years and make small increases.

I have long term tenants. They are really good but we still review rents annually (it’s in the contract) to make sure we are still able to make profit taking into account the increases in the bills we are responsible for paying. We have probably increased rents by £50 since they moved in 5 years ago

We have an amazing tenant in ours. We charge her below what we could get and haven't raised the rent. We would rather keep her than get an extra £100 a month and have someone unreliable who trashes the place.

Last property the rent went up every year until he sold, but by that point we wanted out due to paying above what it was worth (we pay £25 a month more now, nicer area, a garden, garage, extra bedroom and around bigger nicer house), coming up to a year in this one and fully expect an increase. Hopefully not a huge one though.
I'd say keep an eye on your costs and increase if you need to but not for the sake of it !

I know I'm lucky with the tenants I have, but I wasn't sure of the usual long-term approach.

I well remember being a tenant myself (with an awful landlord who didn't maintain the property at all) so try be a really good LL - our tenants are a newly retired couple with a tiny dog and had had all sorts of problems getting anyone to even consider the dog.

I lived in a rented flat and the rent increased yearly by £50. It was a 1 bedroom flat and I didnt think it was unreasonable given the market rate and how everything was increasing around the area.

I think anyone who goes into a rental contract expects yearly review including the cost.

Remember your costs too - if the boiler broke, you'd be expected to sort it fast as the property owner. And costs rise for services every year too.

We rent out a flat. Our tenant is amazing and haven't raised the rent in the last 3.5 years and don't intend to. At his request, not ours, there's a clause in his contract (now on a 2 year one) that after 12 months we have the option to review rent.

We've been in the situation of a bad tenant being in. Loss of rent and replacement of damaged goods and repair of property damage cost way more than we are "losing" by not putting our rent up for our current tenant. To me he is worth every penny and if keeping his rent as is means I keep him that's worth it.

We can still keep a savings pot for replacing items and making good as needed as the flat gets older and our costs are covered.

The agreement with my tenants has a review clause, but the only time I have increased rents is when tenants have changed (and even then not every time), although the longest tenancy I've had is 3 years. I've been lucky, all the tenants I've had have been lovely and it would have felt like I was taking advantage doing an automatic annual increase. At the moment the property is an investment because I can't live in it due to work circumstances changing, but eventually, I would look to move back to it, and it's worth that small "loss" to know that the people living in it are taking care of it. In your case, reviews every two or three years might be more reasonable? As others have said, it's not worth losing good tenants over a wee bit more money

I'm a landlord and my tenants have been there for nearly 3 years. Rent seems to be increasing in our area, so I have left the rent the same until now, and am increasing it by £25/month in April as it is now well below market value (although it still will be, but less so).
To be honest, although I'm definitely in the "good tenants are worth a discount" camp, I'm slightly concerned about the government making rumblings about rent increase laws /caps - I don't want to get stuck with below market value rent.

Our rent increased once in 11 years. If it was increased every year I think we would have considered moving sooner.

The market will decide. If it's too much for them, they'll move. You have to decide whether that risk is worth your while. If they are good tenants, I wouldn't unsettle them, mind.

Ive been here 6 years and my landlord hasnt increased the rent and I never even see him. I dont give him any hassle. Dont ask for minor repairs, only stuff i cant sort myself. I would be annoyed to have the rent raised all the time. Just trying to keep a roof over my head

We have long term tenants and we’ve increased the rent once because we were quite a long way below market. However, this was done after discussion with the tenants and plenty of warning (months not weeks).

Generally we’ve taken the view that tenants who pay a bit below market but care for the property and don’t feel the need to move are much better for us than risking voids and not so good tenants.

Personally I wouldn't - I don't have a mortgage on my rental though. Are you expecting your mortgage payments to increase OP?

Whilst I was renting I never had a rent increase in 10 years apart from once after I had been in the property for 3 years of 5%. If you have got a good tenant that pays on time and looks after the place I wouldn’t review the rent yearly. If you do you risk them moving out, then you have a void and you could end up with terrible tenants

We rented for 7 years. We bought a house 6 months ago. Our rent went up once in that time. By €75pm
We were good tenants. We never asked for anything and we left the house better than we go it. The landlord gave us €100 on top of our deposit when we moved out as a thank you for minding it so well.
The rent went up by €350 for the next tenants

I have to agree with others, whilst increasing rent seems like a prudent idea, every time you do, you will be giving the tenants the option to leave the property (well I suppose they always have that option but it will make it more focused in their mind).
It depends on how confident you are off getting someone charging the increased price who are as good as your present tenants.