As a Landlord, you want the best from your property portfolio. You want a steady income from your rents, no issues with the property and a healthy profit from the yield and capital growth.

One way of achieving a good profit is to increase the rent your tenant is paying when the renewal is due. This is a standard practice for a Landlord and has been for many years. Even by increasing the rent by £50 per month, you have achieved an extra £600 a year.

You might think, great!! Every year I will serve a Section 13 Notice, ensuring I comply with all legal requirements, and increase my rent. If the tenant is not happy, I will issue notice for them to leave. Simple!

The above is an option which of course proves profitable, however, it is important to consider the following if your tenant does not want to increase, or even has requested a reduction:

Is my tenant a good tenant?

If you are considering renewing the tenancy period with your current tenant, I would guess you like your tenant. Do they pay on time? Do they look after your property? They have never/rarely called with an issue. They have been living there almost 5 years. The old saying comes to mind; 'why fix what isn't broken?'

A new tenant might also be great, but there is a risk that they might be late with rent which may lead to further costs for you. Your new tenant might not want to live there for more than a year, meaning you have to go through this process again in 12 months, which, again, could incur costs.

How long will my property remain vacant once the current tenant moves

Your property will most likely need at least a refresh before your new tenant can move in. Depending on your own schedule, and the required decorating, this could take a couple of weeks to finish, which may result in a delay in viewings and ultimately the start date of the new tenancy.

Is it a busy time of year for tenants to be moving? There are always seasonal trends in the market which may result in a longer wait for the right tenant, for example, the new tenant may want to wait until after Christmas to move or may have to give 2 month's notice to their current Landlord in order to move, which means the property remains vacant until then.

You will be liable for the bills, including Council Tax, whilst the property is empty, which can generate more costs to you.

How much will an Agent charge me to find another tenant? Or how much will references cost?

In the Enfield borough, the average Tenant Finder's Fee is around 2 weeks rent + vat. For a tenancy achieving £1000 Per Calendar Month, this equals £553.85. If you managed to increase your current rent by £25 a month, this would result in a £253.85 LOSS for the year before any tax or bill costs incurred.

So, what works best for you?

It is becoming increasingly common for a tenant to ask for a reduction in rent when it comes to the renewal. Perhaps consider the above before making a decision.

To discuss the value of your rental property, feel free to contact me on 020 3418 0580 or email me at tom@gracechurch-property.co.uk.

Until next time

Thomas