Landlords Dilemma: Do You Raise The Rent Or Keep The Tenant?

You may be in a position where you need to increase the cashflow from your rental property, or you have found that it is worth a lot more than you have been currently renting it out at. This is quite common when dealing with an investment property and it always raises a big question when your property is currently tenanted. Do I risk losing the tenant in order to raise the rent or do I keep the rent at the same amount and keep the tenant?

While there is no black and white answer to this, every property is different, there are a few questions you can ask yourself to find the answer you are looking for. Ask these questions to yourself and always consult your property manager for their advice.

How strong is the market currently?

If there is currently an overflow of properties with similar facilities at the same price as yours, you may struggle to find new tenants if you raise the price of rent. This overflow of similar properties could cause a tenant to look for and easily find an alternative that they are willing to move to if you raise the rent too high. A $10 a week increase may not seem like much, but if your tenant can secure a property for cheaper with the same facilities it may prompt them to move.

The best thing you can do is talk to your property manager. They will have market knowledge and will be able to advise you on the best rental price to set for your property.

Is the current rent below market value?

If similar properties in your area are all charging more rent than you are then you may have more wiggle room to raise the rent. It is a good idea to have your property manager perform a free rental appraisal from time to time to ensure that you are getting the most back from your investment property.

In a case where your property’s current rent is below market value, you will have a good opportunity to increase your rent and retain your current tenant. The best thing you can do is talk to your property manager and see where they believe the market is at and how much you can possibly raise your rent.

How good is the tenant?

In some cases, the tenant may not be worth keeping. While property managers are experts at finding and vetting good tenants, the relationship may have soured and what was once a great tenant has turned into a below average tenant. Increasing the rent may be an opportunity to start fresh with a new tenant if the current one vacates the property.

But if you have a fantastic tenant and a great relationship, raising the rent may not be worth risking that stability.

Can I afford the loss if I do lose the tenants?

Securing a new tenant can take a few weeks. During this time, you will receive no rent from your property. It is important to ensure that you can swallow this loss if you lose your tenant. Is an extra $10 – $20 a week in the future enough to make up the loss of income you will receive?

Can I secure the tenant for a further 12 months?

Depending on your circumstances a secured tenant may be more valuable than an incremental rent increase. Uncertainty can cause a lot of stress, so removing that uncertainty could provide more value to you both for your health and finances. A long-term tenant can eliminate long periods of uncertainty.


Knowing when to increase rent and by how much can be challenging for landlords. There can be a lot at stake if you get it wrong. This is where your property manager comes in. They are able to advise you on rental increases to ensure that you receive the highest return from your property.

If you need a property manager talk to Link Living today.