So, your tenants lease is due to be renewed and you think the rent should increase more then what your property manager is suggesting. What should you do ??
Ask your property manager for an up to date rental comparison report. We usually generate these through RP Data and we are looking for 10 similar properties in the local area that have recently leased.
Use the above numbers to work out an “average” price for properties that have the same number of bedrooms and bathrooms.
Next, you want to determine if your investment property is above average or below average. Above average might mean that it has a double garage, pool or recent renovations. Below average means that the home is in original condition. I personally either add $50 pw or drop $50 pw from the “average” price to determine a fair price for your property
Now you know how much you would advertise the property for “if” it was to be vacant. For a good existing tenant most clients would meet half way. So lets do a hypothetical:
You have a good tenant in a property paying $400 per week for an average property. The calculations show that if they were to vacate the property you could advertise for $450 per week. You may consider meeting half way and renewing the tenants lease for $425 per week.
Quite often, a good property manager will do this anyway, but if you are unable to agree to a fair rent, you may want ask for this report so that you can take the emotion out of it and just focus on the local area statistics.