Experienced landlords know that successful ownership of residential investment property is all about maximising long-term income, with little (or hopefully no) vacancy. Novice landlords and shortsighted Property Managers often simply focus on the amount of rent being achieved right now.


A vacant property obviously means lost income. Vacancy for just a few weeks can significantly reduce a landlord’s overall investment return, requiring an even higher rent to make up for the loss!

Tenant harmony is a crucial part of the rental income equation. Experienced landlords would agree that having rent set at around 90% of market value usually achieves a higher long-term income, rather than holding out for tenants who will pay the extra 10%. 

Additionally, tenants who pay this extra 10% are more likely to be finicky about little things, and make more demands for repairs and maintenance. Furthermore, top-paying tenants tend to look around to see what else is available for their money, and move if they find better value. This obviously causes interruption to a landlords’ rental income stream. 

Tenants paying 90% of market value know they are getting good value for money and are therefore content. Generally speaking, they demand less, look after the property better, and stay long-term. This regular and predictable income is ideal for landlords. 

Raising the rent
Many novice landlords and inexperienced Property Managers think that the best approach for raising the rent is to make frequent small increases. Tenants see this as “penny pinching”, which leads to disharmony, resulting in higher vacancy over the long term. 

Rent increases should occur when market indicators show that a 5% increase is warranted. Landlords should employ an experienced Property Manager that monitors the market and informs them when it is time to raise the rent. The Property Manager should then notify tenants and explain the reason for the rent increase. This method is most effective in managing the tenancy. 

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