Rental increase is necessary for a successful property investment. In saying that it’s not always easy for QLD landlords to know when is the best time, how much to increase and how much notice to give.

Due to increasing mortgage rates, insurance fees and maintenance costs it is essential to make sure you as a landlord are getting the maximum rental return on your investment property.

Unfortunately, coming up with the right amount is not as simple as just pulling a figure out of the air at lease renewal. There are many factors that need to be taken into consideration when increasing the rent of a rental property in QLD.

Ultimately, rental prices are determined by the law of supply and demand. So a good Property Manager reviews the rental price each new lease, providing landlords with a Comparative Market Analysis, as well as their professional advice so you are assessing the rental return based on up to date data.

What factors should influence the decision for the rent increase?

• Peak / off peak season – It may be worth leaving a rent increase in an off peak season until there is a stronger market to avoid long vacancies. Your Property Manager can advise how the market is going at the time based on current vacancy rates.
• Vacancy / budgeting – Some landlords cannot afford for a property to sit vacant. Every week a property is vacant it is costing you one week’s rent – which for some landlords can mean they pay the mortgage out of their own pocket. Reducing the rent $10-20 to secure a tenant quickly could save costs in the long term. Your Rental Manager can advise when this may be necessary according to the current market.
• Tenant retention – a great tenant is gold! Keeping a property tenanted for a longer period will reduce vacancy costs and extra advertising fees when finding a new tenant. So if you’ve managed to find a good tenant, do what you reasonably can to keep them!
• Don’t be complacent – If your property is presented well and offers extras or amenities that are well sort after, don’t be afraid to test the market with a higher rental price. The market will soon tell you what your property is worth and you may be pleasantly surprised.

If you would like to know what your property could achieve in the current rental market, request a  Rental Appraisal.

Laws on Increasing the rent in QLD

During a fixed-term agreement, landlords may only increase the rent if a term in the agreement states their right to do so and gives the exact increase amount or exact method by which the increase will be calculated.

However, there is a limit in how often it can be done. Landlords cannot increase the rent more than once every six months – even if the rent increase coincides with the end of the tenancy and re-negotiations are in place.

If the lease is periodic (i.e. it has no end date), landlords are free to increase the rent as they please, as long as they provide the required notice of 2 months and it has been at least six months since the last increase, or since the tenancy started.

For more legislative information on rental increases visit the RTA QLD website.

If you would like to speak to our experienced Property Manager for advice, feel free to contact Rachel today.

New to Aura Rental Management? Get your free Property Management Proposal today to answer all your questions about what we do for landlords like you.