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What is standard practice regarding increasing rent each year?

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Author Topic: What is standard practice regarding increasing rent each year?  (Read 118 times)
Newbie
Posts: 21

I like property

« on: August 03, 2021, 02:00:03 PM »

Hi all, I am planning to rent out my property via a lettings agency.  What is the standard practice regarding increasing rent per year and by what percent?  Should I give the lettings agency instruction to increase rent at 5% each year for example.  What percent increase is standard practice.
Thanks in advance Dennis
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Hero Member
Posts: 4236

Abuse Officer

« Reply #1 on: August 03, 2021, 03:13:07 PM »

There is no such thing.

Bad practice would be doing nothing for years and years and then panicking that your asset isn't rewarding you enough and trying to impose a high rent increase upon your long-standing Tenant. Bit of a shock, that.

So try not to do that.

Modest increases yearly are the way to go. 2%... inflation... whatever you want. 5% each year sounds high to me... but I'm unsure what your property is like, or how desirable it is, or where it's located. It might work, who knows? But after 5 years of that, the rent will have increased by over 25%. I don't think many Tenants can stomach that.

I have a property that started out at 550 and now earns me 650... that has been a tenancy running for 8 years now, and looks like it will continue. In that same time my mortgage payment has decreased, so that's a double-win. Think of the boiling a frog story.
Newbie
Posts: 21

I like property

« Reply #2 on: August 03, 2021, 03:43:42 PM »

thanks for the reply.  Yes I agree that 5% is a bit harsh.  The rent will be 1400 per month for a 3 bed terrace in an upmarket postcode.  Should I give instruction to the lettings agency of yearly increases or just ask to increase in the future after a period of time.
thanks Dennis
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