[signoff icon=”icon-help-circled”]QUESTION: “Hi, My name is Bill Western, I have a investment property in Helensvale, I have not had a rent increase in over 2 years, is the market that bad that the agents can’t raise the rent even $5.00, the rates, insurance and water have become so expensive but no increase in the rents.“[/signoff]
Some parts of the Gold Coast have been hit harder than others with the recession, unfortunately, supply and demand will dictate the price of the rentals more that the economy. If there are a large number of properties of the same kind for lease at a particular time, the prices will be lower than if there are no houses available to lease at all. The north end of the coast has had a large influx of new home builds at about that time so there was a large amount of stock available in Helensvale, Coomera, Upper Coomera, Maudsland and Pimpama .
A good agent will gauge the current situation when the lease is 3 months out from expiry and look at the market, current trends and rents of available properties at that time. They will make a recommendation of a rent increase based on all these factors and advise you accordingly. The tenant must be given 2 months notice of any rent increase, change in conditions of the lease or if the lease in not being renewed hence the 3 month led up to comply with the legislation.
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Ask your agent for a CMA (comparative market analysis) to compare your investment with what’s available at that time to gauge if a rent increase is warranted. Good tenants can be gold in an investment property if they are treating it like their own, it will add value to the property but if the rent is not at market it can detract from the market value as it wont stack up from an investment point of view.
Have clear and open communication with your agent in regards to arrears, routine inspections and maintenance and current rents trends in the area. Does the property need improvement to garner a higher rental return, can you value add to the investment, a Pergola, carport, new fences, paint, carpet to attract more rent. Is your competition all new builds with a comparative rental asking price?
Bill, it may be time to get a sales appraisal and move on to a more profitable investment property with a better return.