Renting is increasingly becoming the done thing. The proportion of renters in Belconnen has risen by 7 per cent between 2011 and 2016, according to census data from the Australian Bureau of Statistics. With more and more renters on the prowl, you may be interested in raising the rental cost of your property to maximise your gains.
If you're wanting to increase rent there are a few things to consider such as timing, communication, and value.
The period in which you can increase the rent on your property depends on the type of tenancy agreement. If your tenants are on a continuing agreement you may raise rent at any time, provided it's not within 12 months of the start of the agreement or since the last rent increase.
Bear in mind though, if your tenants are in a fixed term rental agreement you cannot increase the rental cost unless a provision to do so exists in the original rental agreement.
You are required by law to give at least 8 weeks' written notice of any increase to the rental cost. Returning the rent to its previous amount after a reduced period doesn't count as an increase.
Your rental increase notice must clearly alert the tenants to the exact amount the rent will increase to and when the change will come into effect. If you fail to give proper notice of the change, your tenant may not be obliged to pay the increased rent.
The amount you can increase rent by is not strictly limited by the law, but it could be contested by your tenants.
If your tenant disagrees with the size of the increase, they may go to the Australia Capital Territory Civil and Administrative Tribunal (ACAT) to dispute it. The Tribunal will use the Consumer Price Index to determine who the burden of proof falls onto, and either you or your tenant will be required to show that the increase is justified or otherwise.
We recommend you keep as near to market value as possible to avoid unnecessary tenancy disputes – or even losing your tenants.
For help in setting a fair rental price, consider taking a property manager on board. At Ray White Belconnen, we have an experienced team of property managers who can ensure you receive great, stable rental gains from your investment property. Get in touch today!