When to Bump Rent up and by How Much

Despite being a landlord for four years, I’ve never actually had to impose a rent rise on a tenant.

My investment property, a large one-bedder art deco on Queens Road, has had just two tenants since I moved out – and I bumped the rent up $30 per week between the first and second tenants, early last year.

It’s currently fetching about $250 per week.
By today’s standards however, that rent is grossly under market.

Another 1-bedroom apartment in my block was open for inspection yesterday – exactly the same layout as mine, but unrenovated kitchen and bathroom, and carpet instead of floorboards. It also didn’t have a car park. It was asking $275 per week, and generated a lot of tenant interest.

The cheapest renovated one bedders around me with a car park are asking $330 per week minimum, and though being in modern towers (without a gym or pool), they are much smaller (about 45 sqm versus 65 sqm).

I’m now caught in a predicament of increasing the rent on my own place – but am grappling with how to go about it.

A fair market rent for my place is now around $300 – and yes – rent in that area have increased about 20 per cent in the last twelve months alone.

But a jump from $250 to $300 would almost certainly spook my tenant, who has been fantastic and I want to retain.

I know we have a fair share of landlords referring to this site.

How do they walk the line between rewarding a good tenant, but also absorbing more of the costs associated with owning the property (like four interest rate rises in the last six months).