Tips on Increasing Rent with Little Expense

Tips on Increasing Rent with Little Expense
03-Jul-2018 Mark Honeybone

Tips on Increasing Rent with Little Expense

These days, things like regulations and rates which cost more than a few years ago, bring down the yield on a property. That is unless you increase rent. Recently rent has been increasing due to a lot of new regulations coming in. If ‘ring fencing’ comes in, rent may increase again. These are factors that the property investor has no control over, but there are many others they do.

A landlord can increase rent after updating the property’s value in such ways: 

  • Increasing rooms
  • Adding a cabin attached to the premises
  • Adding minor dwellings
  • Turning into a room by room proposition and furnishing
  • Doing a full renovation

Of course, there are many other options, but the above gives you an idea of what I mean.

Not every landlord has funds to do the above, so how can you increase rent without putting $5 or $150k into your property? Here are some ideas that may cost you a little or nothing at all:

 


 

 

 

 


Clean when advertising:

This is an opportunity to raise the rent, especially if you don’t raise the rent as regularly as you should. Do it between tenancies. Before advertising and showing people through, make the place looking tidy and smelling clean and make sure everything works.

If a prospective tenant is looking at the property and something doesn’t work (or is broken), they won’t be impressed. If you can afford a fresh coat of paint for the lounge, it may be an inexpensive way of enhancing the property and adding the ‘feel-good’ factor to it. Make sure the lawns are done and hedges all trimmed back nicely.


Rent at the right time of the year:
 

This can differ for various parts of the county. For example, if February is the most popular time of the year for people to look at rentals (this may be because of University returning), then you should aim to have your fixed tenancies finish around that time.

There is nothing better for a landlord to see than 20 people attend an open home to rent creating scarcity and potentially a bidding war, which then creates a higher rent price.

 

Don’t be a lazy landlord, put the rent up regularly!

I often see Property Investors who don’t treat their portfolio as the business that they should. Landlords who don’t use Property Managers often don’t keep up with the rental market and don’t increase the rent when they should.




 

 

 

 



 

You can keep up to date with the help of your Property Investor Association as well as information on the internet, including the NZ tenancy website, which states latest rent amounts for bonds lodged. This provides the latest information giving you high and low rent amounts. Talk to Property Managers and hire one to get a tenant for you. Some will take care of this aspect for a fee.


Pets

Most landlords state that they don’t allow pets, I put “pets negotiable”.

I have had a tenant that had a cat. She was a young tenant but ended up being a long-term and very loyal one. By restricting your listing with this condition, you may miss out on a very good tenant.

Recently I moved my family to Auckland, and we needed to rent while we were deciding where to settle. We had our 10-year-old cat with us. The landlords who didn’t allow pets, missed out on a perfect tenant who always keeps his house clean and tidy, pays rent on time and is happy to pay the crazy high rent in Auckland. And they missed out because of a cat which doesn’t create any issues.

Don’t dismiss a possible perfect tenant. You will still get a chance to vet them. Also if there is a dog or another animal that is requested, you can potentially increase the rent because of it.