Annual Rent Reviews

In the past few years, there was a rental oversupply, so your rental income may have dropped, or at least stagnated over those years. Since interest rates have increased, and buying property has become more difficult, the rental market has increased in demand. Current market value of your rental property may have also increased.

If you haven’t done so for a while, have a look on realestate.com.au for current advertised rentals in your suburb, and see how your weekly rental income compares. You may find that the rent you currently receive is well under the current market value. If so, I recommend that you do the following:

· Check if your tenant is in a fixed term lease, and when that ends.

· If your tenant is on a week-to-week lease, or the fixed term ends within the next 3 months, have a chat to your property manager to discuss increasing the rent if it looks like yours is now under market value.

I note that in NSW, the rent can only be increased once every 12 months, so if there has been a recent rent increase, make a note in your diary for the date 3 months prior to that 12 month timeframe, to speak to your agent.

If you find that your rent is significantly lower than current market value, it may be possible to increase the rent to meet the market, even if there is a tenant in the property. If it can be proven that the rent increase is in line with market value, a tenant may not have a case to object to a large rent rise. Many tenants are now accepting that rents are increasing, and agree to pay a higher rent, rather than having to move to another property, which is likely being advertised for the same or even higher rent.

While not only ensuring that you are maximizing the return on your investment, a rent increase may also increase your ability to borrow for your next property purchase, or increase your prospects of refinancing your existing mortgage/s and taking advantages of any cashback offers and lower interest rates. If you have any questions about investing in property, or refinancing your existing investment property loans, please email me on jennifer@jblhomeloans.com.au, or get in touch via my Facebook page JBL Home Loans.