Should I up my rent?
It’s a question on the radar of every landlord and investor at some point – especially in the wake of record-high rents and stable market demand across most of Greater Sydney.
And while Covid lingers around like a terrible smell, it’s not the only thing that’s in the air; there also seems to be a plume of rent negotiation.
Despite our return to Covid restrictions, the South West Sydney market continues to see a steady increase in the value of properties being sold since Christmas last year, as well as the number of people attending open homes right up until lockdown – an average of 20-40 people per Prudential open.
So while Covid once again proves volatile for hospitality and entertainment industries, the local rental market marches on, relatively unscathed – teeming with prospective tenants raising their hand for a private inspection, and eager to get into a rental home.
With international borders still closed and many people working from home, a major factor behind the current and consistent demand is families looking for larger rental properties to meet changed lifestyle needs.
According to Domain (via SMH), four bedroom houses now represent 24% of rental market listings compared with 17% in 2003, indicating a trend for ‘formerly owner-occupied bigger family homes’, which are being bought by investors and converted to rentals.
But where there’s increased demand for some rental properties, there’s usually less for others – and this tends to be the case in over-developed areas of Sydney, where an oversupply of rental properties (most often home units in the current market) is reducing the bargaining power of some landlords.
So if you’re an investor, is right now really a good time to up your rent?
While every case is different, it may come as a surprise that around 30-40% of Prudential’s rental property stock has seen rent increases over the past few weeks, in order to match the market – so in numerous cases, the answer is yes.
But as always, taking advantage of the demand works on a case-by-case basis, as not all rental properties will currently qualify for rent increases. Of course, it also depends on the type of tenancy agreement you have in place with your tenant, whether this is a fixed-term lease or periodic agreement, and what your tenant’s current circumstances are.
In every case, if you’re looking to be responsive to the current market, the best thing you can do is get a professional rental appraisal of your investment property from an experienced agent. This will help you to assess how your property’s size, location, condition and changeable factors can improve its rental value, in alignment with current market conditions, which Prudential Real Estate can provide – simply visit our Market Appraisal portal or contact our office today.
*For tenants financially impacted by Covid-19, please make your agent and/or landlord aware of your financial situation and visit NSW Fair Trading for government information and support.
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