Gone are the days when the rent on a property was increased and the renter would either accept the offer, or if they felt the increase was not justified or the property wasn’t representing good value at that amount, they would simply move out – grumbling as they went.
And whilst this sounds like a much simpler way of doing things, it wasn’t always the best scenario for either the property owner or the renter.
These days, it would be very rare that a renter felt like they weren’t in a position to “negotiate” if they didn’t agree with an increase to their rent. They are pretty savvy about what is happening in the market and more confident than ever in speaking out if they feel hard done by.
Although this doesn’t sound ideal, it is not necessarily a bad thing as it provides the owner with more options. We would rather a great renter let us know how they were feeling and why they are resistant to an increase, than suddenly receive notice that they intend to leave without the opportunity to discuss a different course of action. When the lines of communication are open, it definitely works in the owner’s favour.
But this trend towards more negotiation doesn’t mean that as an owner you should always start high with a rent increase because you are going to have to negotiate down. That approach can easily backfire, leaving everyone concerned, upset and out of pocket. It also doesn’t mean that an owner will never be able to significantly increase their rent.
Renter sentiment in today’s market and the legislation we operate under simply requires that we are very transparent when it comes to increasing rent. The same strategies apply as they have always done when determining how much an increase should be, we just need to ensure we have the evidence to support the change. And are prepared for some pushback at times.
It’s a good thing we are in real estate – negotiating is in our DNA!
