It is commonly believed that the average landlord thinks about increasing their rent EVERY 2 seconds. We know, incredible.
But if we are honest this is not essentially a bad thing.
Whether your reason is due to inflation, fluctuating interest rates or the government’s tenancy deposit scheme, it is good to always keep your monthly expenses and cash flow in perspective.
Any unforeseen additional costs – if you are not prepared for them - can lower your cash flow and passive income.
Now before you get worried about your rental properties possible cash flow potential, there are ways to safeguard it.
Namely by using a Rent Increase form.
Using this clever form, you can account for any changes and alter your tenants rent - yes even if they are only in the middle of their existing tenancy agreement – to ensure that your cash flow stays strong.
To protect your passive income download your Notice of Rent Increase Form or keep reading to find out more on how to use this form...
What is a Rent Increase Form?
All this form essentially does is enable you to increase your tenants rent part way through an existing agreement.
Now we don’t literally mean just after they have just signed the contract. No.
The general rule of thumb for using this form is to use it when your tenant is about halfway through their existing agreement.
Similarly, this does not mean you can only increase their rent at this one singular point.
You can change it at other times too. You just need to bear a few things in mind first before you proceed.
Take for example this scenario.
Your tenant’s agreement is coming to an end, but you want to increase their rent. To do this, you must specify the amount in a new shorthold tenancy agreement.
So as you can see - in this scenario - you are presented with 2 choices. One, where you create a new shorthold tenancy agreement or two, where you choose not to due to wanting to change tenants.
Then there is this next point to consider...
Before you make any rental changes, you MUST first give your tenant written warning. Not only will this keep relations with your tenant easy and smooth, but it will give you time to foresee any problems with your contract.
You see, there is a procedure you need to follow to ensure you can successfully implement this rental change.
Here is the most important one for you:
Contract: before you do anything it is best to check the existing agreement to see if you are in fact allowed to do so.
There are such clauses that can forbid a landlord from increasing their rent, until the current contract expires. You need to watch out for this clause when creating your tenancy agreement as it could end up hurting you at times like these.
If on the other hand, there is no such clause in the contract you can then freely implement this change with no problems.
Our only recommendation is that you do this carefully, follow procedure and ensure that your tenants are given enough time to adjust to their new rental prices.
By doing so, you can effectively maintain Landlord/Tenant relations and keep them wanting to live in your rental property.
For more help implementing this Notice of Rent Increase, contact our Property Mentor Team today! With more than 20+ years of property investment experience under our belts we can ensure that your passive income remains consistently strong, month on month, for the rest of your life.
Call us today on 01908 309274...