Can the owner raise the rent?
We all know the cost of living is currently increasing and the household budget is stretched, so the last thing many rental occupiers are hoping for at the moment is an increase in their weekly rent.
It begs the question, can the owner raise the rent? Well, the answer is yes but not too often and only under specific circumstances.
So, let’s delve a little deeper.
When can an owner raise the rent?
Although rental laws vary from state to state, sufficient notice of any rental increase must be given.
In terms of fixed-term agreements, the rent cannot be raised during that term but can be increased when the rental agreement is renewed.
In this instance up to two months’ written notice of a rent increase is required, depending on the state or territory where the property is located.
Periodic agreements can also be subject to rent increases, but again sufficient written notice is required, and this varies from state to state.
How often can the rent be raised?
In all states and territories, there are laws around how often a rental increase can occur.
As a general rule of thumb, a rent increase cannot occur more frequently than every six months, and in many cases, they can only occur once every 12 months.
Twelve-month minimum time periods between rent increases apply in:
How much can the rent be raised by?
How much the rent can be raised by also varies. In the ACT for example, rental owners can only increase the rent by 10 per cent more than the increase in Canberra CPI.
Meanwhile in Victoria, a rental owner has to show exactly how they have calculated the proposed rent increase.
Elsewhere, the rent can be increased by a figure determined by market conditions.
That said, rental owners are also encouraged to appreciate the value of a good long-term renter who looks after the property, which means they may be more conservative when it comes to how much they raise the rent by in order to retain a good rental occupier.
What sets the rent price?
When it comes to how rental prices are set, this is often determined by a range of market forces.
- How many rental properties are available in an area (the vacancy rate)
- How much demand there is for rental properties in that area, and
- The price similar properties command in an area
Meanwhile, rental owners have their own budget and expenses to weigh up when it comes to a rental property, including servicing the mortgage, local council rates, and expected outgoings on maintenance and repairs.
All these factors work together to set the rental price of any property.
How we can help
Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.
We manage every property as if it were our own and you can learn more about our property management services here.
Alternatively, if you are looking to rent a property, you can view the properties we currently have available here.