Should I increase the rent?

[Everywheretwice]

I own a property that I rent to a lovely family, a couple and their primary age son. They both work full time. The wife's father also lives with them, he works full time too.

They've been in the property for 6 years, they have always paid £800pcm, on time, no issues, and I've never raised the rent. Market value now would be at least £1100.

I'm torn between raising the rent slightly to help cover increasing costs associated with the property, or leaving it as it is because I like them.

I've kept well informed (I attend Landlord events, member of associations etc) but I can't get past the feeling that raising the rent is at odds with the fact they're good tenants.

'Thank you for your great communication and regular payments, I'm going to charge you more...'

I agree smaller increases (3-5%) every other year would have been a good idea but somehow 6 years has flown by! I was thinking about it when Covid hit and I certainly didn't want to raise it then.

Again, they’ve had years of paying under market rate and have 3 adults working full time in the house.

I’m sure you do things I feel are wrong.

I was thinking £850, thank you.

I think current rental rates are extortionate so I wouldn't want that.

I agree, I wouldn't raise it more than 3-5%. Even if they could afford it, it would really sour our relationship. I'd be fuming in their shoes!

I think it would be entirely reasonable to raise it by £100 this year and same again this year. At this point the tenants know they have been lucky at six tumultuous years with no increase. You have been more than fair.

You definitely have to raise the rent, you should really have been doing it by a small amount each year. With 3 working adults I think £100-£150 increase would be reasonable, surely they must be expecting it.

Being a landlord is not a charity and I can never understand why some people think it's so awful that tenants are paying someone else's mortgage. It's a business at the end of the day and without private landlords there would be a great deal more homeless people!

I have been in a similar situation to you, we like the tenant and didn’t want to upset the apple cart. But, with increases in insurance, ground rent and Section 24 changes that mean I pay 40% tax on rent means I’m making a loss every year. I’m now selling the house, and our lovely tenant will have to find an extra £300pm to live in a similar property.

@Everywheretwice what happens if the boiler needs replacing? Etc don't have enough in reserve to replace it? Do you have enough in reserve to change the bathroom or kitchen if it needs replacing. There are a few adults living there so the wear and tear might be heavier than normal.

Don't think of the increase as you being greedy. Costs have gone up and if your tenants are reasonable they'll understand.

Good luck with whatever you decide to do.

I’m absolutely disgusted. Our lovely house is doing well for me and well for them. And then when I offer to buy this house we would have all done well. In that time she’s had babies, I’ve had awful heart breaks and I can say that we’re both just good people. Unlike some on here. OP please just carry on being a good person. And it will come back to you.

My rent went up 9% this year

No idea why you think the tenants would be ‘fuming’ at a very reasonable increase. They should be thanking their lucky stars they have been undercharged for so long

I think 100 seems reasonable with smaller increases after that. Just explain that you are no longer covering the costs involved with the house so need to increase the rent. No increase for six years has been very helpful to them, I'm sure. With three full time working adults, I'm sure they can absorb that.

I had the same issue recently. Here's the thread if it helps.

The upshot was, I notified him of an increase of £200 per month. He came back to say he could only afford £100. We agreed on a final increase of £150. He knows that the rent is reasonable and he couldn't get that anywhere else locally. But I appreciate that he is a good tenant.

I will be doing small annual increases in future.

https://www.mumsnet.com/talk/am_i_being_unreasonable/4999516-rent-increase

This thread has warmed my heart. Because now I can see that not everyone in the world are about themselves. I’m going to have a great day today thinking about how my rich as fuck landlady isn’t so quite self absorbed. I’m an NHS nurse who cared for all of your relatives. Not everyone’s an asshole.

I'm not aware of any other business relationship where costs stay the same because you've been a good customer/client. Insurance goes up, shopping prices go up, utilities go up etc etc - don't make it personal.

£850 is a very reasonable amount IMO. Small and regular increases as needed.

Remember, if something needed doing in the house, they wouldn't ask you not to fix it because you're a good landlord. And you wouldn't be able to get it fixed at 6-year-ago prices.

You were paid for your services caring for families, you didn't do it as a charity. As a landlord you can't tell your tenants that, sorry, that repair will have to be delayed because I kept your rent down so can't afford it. Of course you have to be fair but fair to the landlord too. Maintaining the property you rent doesn't come free you know.

You do know social housing tenants have their rent increased every year? Why don't you offer them a reduction as you're so reluctant to increase it?

I think you’ve been more than fair. I agree that £100 sounds reasonable

You didn't actually, but have a heart warming day anyway xx

This, although I’d increase by £100 this year.

Some people just aren’t cut out to be landlords. What happens when you have to carry out maintenance? Upgrade the kitchen, windows or bathroom? Do you have the money? You need to start treating them as tennants rather than friends.

Actually it was a student at that time so paid about £10k a year to drive an hour to work when my babies were in bed. So I’ll enjoy my cheap rent and my patience when I had no oven for weeks because like I said I’m not an asshole. And nor is my landlady.

This

I'm a landlord and did put some rents up this year. Last increase was 3 years ago, and previous one 5 years before that. All are still way below market value

Tenants are long term (longest 17 years) and all accepted, some said they were surprised at the small increase (£100 ish) and how long I hadn't raised it for.

I always sort any issues out fast and since costs have gone up, need to ensure the business is viable and I can cover all emergencies. I replaced 3 boilers in 6 months last year at a cost of £10k, but that was fine as I make sure the money is kept ready. I'm not waltzing around in profit, the money goes back into the houses - new kitchens, bathrooms etc.

It's a business, you can be kind to tenants but still treat it as such

Many students do placement that costs them. You don't get a sainthood for it, it's part of training you accept when you start the course. Then you get paid for working. That's the only thing you're entitled to - fair pay for your work.

You're lucky to have cheap rent but if your landlady needs to put it up to cover costs, that's how it is. She doesn't have to take food off her table to subsidise your rent.

It's a business. Not a fluffy friends arrangement. Being a good person doesn't mean absorbing the additional costs of housing 3 adults in full time work out of her own pocket. I'll repeat the last bit - three adults in full time work who can easily afford an increase. Even council tenants have their rent increased every year.

I'm not surprised they are so nice. They will know full well that three adults and extras wouldn't get rent this dirt cheap for years on end anywhere else.

I'd raise it by 100 and agree at 75 if they counter offer, you'll still be well under local rent prices and still doing them a favour. You are already absorbing costs and unless you're really well off you need to put a bit aside incase something happens that insurance doesn't cover. You've been very generous for not increasing for 6 years but you should absolutely not be renting it out at a loss. Remember they may be good tenants but they aren't family and they have saved a lot by you not increasing it over the years