As a property owner, your goal is for your properties to give you profits at the end of each month. It is your responsibility to ensure that your tenants are getting the best services as per the tenancy agreement. You need to collect rent, pay bills in some instances, repair and remodel your houses among many more things, to make sure that your houses are in order.
Many landlords took huge mortgages and bank loans to build their homes. With all the expenses that maintaining rental houses comes with, many are the times that homeowners are left penniless. The amount they are charging for their houses is barely enough. This is where the question of whether a landlord is charging enough for his property comes in.
When to increase the amount you charge for rent has always been the most difficult situation every landlord have to face. Simply because having signed an agreement with your tenants; it becomes harder to breach that contract, mostly because this might make you lose some of them. On the other hand, for some solid reasons it becomes necessary for you to increase your rental charges. This way you will be able to pay for your property maintenance, paying off the mortgages or a bank loan, paying taxes, and above it all you are in this business, to make money; you will need your profits at the end of the month.
However, before you decide when to increase the amount you charge for rent, there are some factors you need to consider. Below are some of them.
a) Location of your property.
As a landlord before deciding on the rental you need to look at where your property is located. Is it in superb of the city or the rural setting? Most important thing to note is that the rental rates in the city and away from the city are very different. If your property is located in the city, and the rent you charge is lower, not forgetting the demands of the city and its environs, then you need to increase the amount you charge for the rent.
Similarly, if your property is located away from the city or in a remote area, then the demand in these places is not high, and also the expenses are slightly lower. It’s always good to charge a lower amount on your property in areas like these. If you charge a higher price here, the chances are that you will end up with so many unoccupied houses, and this will give you great losses.
b) Market Conditions.
Before deciding on when to increase the amount you charge on rent, it is always good to look at the current economy of your country. When the economy is unfavorable, this might not be a good time to increase your rent. However when the economy is very favourable, and other investors are also coming in to set up their properties and businesses in your area, then this the right time to.
Increasing the amount you charge on your property has never been an easy task for property owners. However, if you want to make this manageable, this might just be what you need.