Home Front logoQ. I am a Landlord and my contract on my investment property is about to expire and the agent has contacted me to ask if I wish to renew? I would like to extend the contract for sure do but I also want to put the rent up a substantial amount given the rent was agreed in a slow time so I would like to bring it in line with current market value. However my agent has said this is too much of an increase in one hit and is likely to force the tenant to serve notice. What do you advise I do?

A. Being a landlord and owner of an investment property of course your primary concern is that you need this to work for you financially, and if the rental yield is low then it may not be cost effective to keep on the existing tenant if they choose not to renew with the increase proposed. However with mortgage rates so low at the moment most landlords are paying very little for their mortgages and therefore easily covering all the expenses as well as recovering some profit. If you are lucky enough to have great tenants and fall into this category then I suggest you look at the bigger picture before you suggest a large increase or proceed with serving notice. Most tenants will absorb a reasonable increase of say £5 or £10 per week but substantial increases are normally not met with a favourable reception and sometimes even if a tenant can afford the increase they will feel that the landlord has failed to see that that they have been a great tenant and out of the principle of it decide to move elsewhere. This happens time and time again. Tenants would rather up sticks and move to an identical property within the same location paying more rent than stay with a greedy landlord as they would feel that there was no sense of mutual respect between themselves and their landlord if they had acted in a good and proper manor for the duration of the tenancy but the landlord chose to ignore this and bull doze in with a hefty rent increase regardless, with no consideration of their conduct over the tenancy. I always advise landlords to opt for a reasonable increase if there are good tenants in their property to encourage them to stay on. After all if they were to vacate, this will always incur more costs and even possibly leave the landlord with a void period on the property depending on the rental market at that particular time. The extra costs and void period would naturally eat into any profit you would gain from a rent increase and indeed most would agree a better solution would have been to keep on the existing tenant with a reasonable increase. I would strongly advise that greed does not cloud your vision and that reasonableness prevails.