Raise the rent or keep the tenant?

WHILE your property investment may look great on paper, things can quickly turn on their head if you’re faced with a tenant thinking about vacating because they’re being faced with a rental increase.

Director and founder of BuySide Buyers Agency Josh Masters said there are factors to consider when faced with this dilemma.

Can I afford the loss if my tenants vacated?

"While we may be keen to get that extra $10 or $20 increase for the year, this can quickly be wiped out if it takes you two or three weeks of vacancy at $700 or $800 per week," Mr Masters said.

"In good times or bad, you need to weigh up whether you can handle a potential loss of income upfront in order to get that additional pay-off over the longer term."

Is the rental market strong at the moment?

guns and feel that we’re justified in increasing the rental amount, if there are a hundred properties on the market just like yours and demand is low then the chances of you scoring a new tenant at a higher rent could be difficult," Mr Masters said.

"Have a chat with your property manager to get their view on whether the property would rent out at the desired price.

Is the current rent below market value?

"While it’s always important to check with the property manager to get the latest market insights, you may have bought into an investment that is being rented out far below market value," Mr Masters said.

"Even in a tough rental market, increasing the rent could still mean that the higher rent is still quite competitive.

"If the tenant is keen to stay on they will also be weighing up their options.

"And if they want to stay in the area, they will understand that they may not secure another property at such a cheap rate. "While we may like to stick to our