RENTBUSTERS: What’s likely to happen if you increase your rent?

Raising the rent is a controversial topic at the best of times.

For tenants, it’s always unwelcome news; why on earth would I want to be paying more for what I’m already getting?

For landlords, the task of presenting a rent increase can be just as unpleasant. What if I lose a good tenant? Or they no longer look after my property? Will I be able to find another?

There’s a lot to weigh up, and the market conditions have to be absolutely right – which is why the worst decision for landlords is to jump straight to demanding a rise on unreasonable grounds. And unfortunately, when it comes to justifying that increase, having a hike in your own expenses or needing to lay down more on your loan simply won’t cut it.

So in one of Greater Sydney’s sharpest rental market increases in 13 years, how is it best to navigate asking for higher rent?

In short, by having an experienced property manager who knows your tenant – and who can guide you on the potential outcomes of increasing the rent, on a case-by-case basis.

With this in mind, we’ve outlined the three most likely scenarios below.

1. The tenant accepts the rise.

So, your tenant chooses to stay and pay the higher rent. Best case scenario! 

This could be due to a number of factors. The increase may be completely justified and still competitive within the market; or, it may be the result of supply and demand, with few available comparable properties influencing their decision to stay.

Alternatively, your tenant’s decision could be purely situational, based on not wanting to move – and still gaining enough value from your property to outweigh the rise.

In any case, having your property manager understand and maintain a healthy relationship with your tenant is key to maximising your chances of a positive outcome – ensuring that they’re happy in your home.

2. The tenant accepts the rise, but with demands.

Once you’ve worked out a reasonable increase and have put this forward to your tenant, you may receive a yes with conditions. For instance, you’re asked to update the old air conditioner, to change the showerheads, or to permit pets.

This is where negotiation is vital, after you’ve determined the extent you’re willing to go to in order to meet halfway. Is what they’re asking reasonable, or a quick fix that could add value to your property in the long run? Or, are they asking for something much greater that will only benefit this tenant specifically, and which could outweigh any short-term gains made from increasing your rent?

To decide what’s a reasonable ask, consult your property manager who can provide the best advice based on experience with comparable investment properties.

3. The tenant provides their notice to vacate.

Unfortunately, it happens. Sometimes as a result of your tenant finding a better offer on the market, or because their tenancy was due to expire; other times, it’s due to an inevitable circumstance – because they need to move to a different location, or their lifestyle requires a different type of property. 

Whatever the reason, it’s a situation you’ll want to depart as soon as possible (or avoid entirely), as a vacant property means no rent at all… and no rent is worse than low rent.

Before taking any decisive action, consider the pros and cons. Is an extra $5 – $10 a week worth risking a vacant property, and will you actually lose what you thought you’d gain? 

Or, is an increase well overdue, and will you be able to comfortably find another tenant in the current market should your current one decide to leave?

As always, speak to your property manager first. They will guide you on the most likely response of your tenant, and therefore the best course of action to ensure that your property continues to achieve top market rent – from a tenant who is willing to stay.


Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au

Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au

Prudential Real Estate Macquarie Fields |  (02) 9605 5333 | macquariefields@prudential.com.au

Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au