The price of everything is going up and that includes rent on UK residential properties. As a landlord, this has an impact on me and the tenants currently occupying my rental properties.

Inflation is a hot topic now, and we are feeling it in the UK. It is no longer background noise, and, in my opinion, we have to try our best to insulate ourselves as much as possible. Like reducing the weekly shopping bill for example. We love seafood in our house and normally include king prawns and salmon in our weekly shopping. If we need to swap to our little luxuries for a big box of fish fingers, then so be it.

I don’t know the exact figures but I’m well aware that rents for UK residential properties has gone up over the last 12 months. This has got me thinking about when I should increase rents.

Existing tenants

I haven’t increased the rents in my properties over the last few years because I have been happy with my cashflow. And my interest rates have stayed the same. This is because I have my mortgages on 5-year fixed deals.

By keeping the rents at the same amount for x number of years, I feel I am a fair landlord. A landlord who cares about his tenants and their financial situation. My way of thinking is that you scratch my back, I scratch your back. If I come across as a decent landlord, the tenant will normally look after the property.

When it comes to property, I am very much long term buy and hold. When a tenant first moves in, I let them know that it’s their home for as long as they want it. Providing they aren’t a nightmare tenant that is. Like being anti-social to their neighbours or damaging the property.

Another big part of being a landlord is making sure each property is legally compliant. A useful guide for both landlord and tenant, is the how to rent guide. This will inform both parties what the landlord needs to arrange to ensure the property is legally compliant. Like up-to-date Gas certs or Electrical certs.

One of my tenants has been in one of my properties for about 15 years now. That makes me feel old. Everything lately, makes me feel old. Anyway, how old I feel aside, I haven’t increased the rent on this property in 15 years. Am I being too fair in terms of increasing rent? And do I need to get my business head on?

What I’m trying to do is paint the picture of a decent landlord who cares about his tenants. But as I’m writing these words, I’m thinking that increasing rents is going to happen at some point.

Getting my business head on

I think going forward, I need to increase the rents on my rental properties. I currently have 7x rental properties. If I increase each property by £50 pcm, that is an extra £350 pcm in cashflow. And in any business, cashflow is massively important. This will be reviewed on a property-by-property basis, but I am going to look into rent rates for the areas in question.

The tenancy agreements for my rental properties are due for renewal over the next few weeks. This will be a good time to discuss the rent with my tenants. It’s not something I’ll be looking forward to, but it needs to happen.

I’ll offer an example of why I need to get my business head on. Last September, I had a new ish tenant (been in property at the time about 9 months) telling me she was about to leave the property. The majority of her rent was paid by the council (LHA), and she had to top-up £150 to cover the total rent of £500.

When we had a chat about it, she told me she couldn’t afford the £150 top-up so I told her she could reduce it to £75. In this case I am £75 down on what I should have been getting paid. It felt like the right thing to do. It felt good but it was a poor business decision.

Over the last few months, this tenant has been on quite a few holidays. This has nothing to do with me really. But I’m thinking that I should probably be getting the full amount. And to add to this £500 is probably too low. When I do discuss the rent, I won’t be increasing it the going rate which is probably at around £550 or £575. I will just ask for the £500 pcm.

With this increase, I’m thinking of saying that the rent will be going back up in 6 months’ time. This gives the tenant time to adjust and get her head around it. This will be the same for the other tenants. If I’m going to increase the rent on any of the other properties, I’ll give them 6 months’ notice.

I’ve said this many times in my posts and I’ll say it again – life is about balance. It’s the same for deciding whether or not to increase rents. I want to be the best landlord I can be. I want to help the tenants out when I can. But I also want to run a successful property business.

Decision time

What I’m going to do is have a chat with each of my tenants over the next few weeks. Put them in the picture. Explain that due to inflation, rents in the UK have gone up. I’ll explain that I’ll be reviewing the rent over the course of the next few months.

I have long-term tenants who haven’t seen their rents increase at all since moving in. In my head, I’ve been a fair landlord looking after the interests of his tenants. I’m just trying to get that balance I previously mentioned.

If one of my tenants’ rents is currently £550, and the going rate is £650, I’ll increase it to £600. These are the types of decisions you have to make as a landlord. And if I’m serious about becoming a full-time property investor, I need to get my business head on.

This property post has just been to get some info out there relating to inflation and the fact that rent on UK residential properties has gone up in the last 12 months. If you want some more property info check out my 2nd book, The Dormant Landlord. This is a brutally honest account of my 20 years in property. And it will help you as a landlord and property investor. Especially if you are a beginner and are just starting out in property.

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