How to Determine the Right Rent Increase for Your Adelaide Property

When you're a landlord, setting the right rent can be challenging. Especially in Adelaide where the rental market is currently very tight.

But no need to worry.

With over 20 years’ combined experience in the Adelaide rental market, We Connect Property can help guide you through the process and break down the essentials of determining a fair rent increase to ensure your investment is sound (and successful!).

Market Conditions

First of all, it’s important to understand that setting rental rates is all about supply and demand.

And right now, Adelaide's rental market can be as unpredictable as the weather.

What does that mean?

If there are a lot of people looking for properties and not enough homes to go around, rents tend to go up.

But if there are more homes than tenants, rents tend to hold steady, or head south.

This is where the experienced team of property managers at We Connect Property can offer invaluable insight.

Here are two major factors that can contribute to making sure your rent is where it should be.

Maintenance vs. Capital Improvements

Let’s talk about maintenance and capital improvement first, as this is often a sticking point for tenants.

If your property is run down, or in need of repair, tenants can be reluctant to accept a rent increase.

But what’s the difference between basic maintenance, and improvements that actually improve - and add capital value to - your home? And what bearing do they have on rents?

Maintenance, like fixing a blocked toilet or replacing tap washers, is what keeps your property in shape - but doesn't typically add value or justify a rent increase.

However, capital improvements are a different kettle of fish. These are your big-ticket items!

Think installing a new split-system aircon, retiling the bathroom, adding extra permanent storage or laying new carpets.

These upgrades not only increase your property's appeal and value, they can often justify a rent increase too, as the amenities are now upgraded.

But it’s not always easy to know which improvements are going to pay off.

That’s where your property manager can help.

If you’re unsure what upgrades are going to benefit your investment, chat to us at We Connect Property.

We can not only help you save money by identifying unnecessary upgrades, but conversely understand which ones make sense for your property and the market you’re in.

Market Movements

If the rental market in your area has seen an increase in demand, or if comparable properties are renting for higher rates, you may choose to adjust your rental prices to match the going market rate.

But how do you know what that is?

One word. Research.

Knowing your area and what other properties are renting for is key to setting your own.

But if that seems a bit overwhelming don’t worry.

The good news is that this forms part of any good property manager’s role, and at We Connect Property, we can do the heavy lifting for you.

As experts in our market, we can provide you with the insights you need, as well as recommendations based on actual data, to help you achieve the best returns for your property.

Practical Tips for Adelaide Landlords

When it comes to rent increases for your property, it pays to stay ahead of the curve.

Here are five simple ways you can make sure you’re always one step ahead:

Stay informed: For the latest rent increase guidelines, the SA Government's website is your go-to resource. It's packed with loads of information to help you remain fair and compliant with the law.

Communicate clearly: A quick chat with your tenant and/or property manager goes a long way. Be open to discussing potential rent increases before settling on them, especially if they're linked to property improvements.

Be reasonable: Higher increases can lead to unhappy tenants and, ultimately, vacancies. Your property manager can help you consider all angles and achieve the perfect balance, ensuring your rent is competitive yet fair.

Document everything: Keep a detailed record of all improvements. This is not only important for justifying rent increases but also for tax purposes.

Consult the experts: It goes without saying that an experienced and knowledgeable property manager can be your most valuable asset. We Connect Property have the local know-how and demonstrated experience to guide you through every step of your rent review process.

Ultimately, it’s all about finding that sweet spot.

By keeping up with market trends, knowing the difference between basic maintenance and upgrades that add value, and staying well-informed, you can navigate rent increases with ease.

And remember, We Connect Property is always here to lend a hand or offer advice.

So, whether you’re looking to adjust the rent on your investment property in Adelaide, or you’re simply wondering if the current rent you’re charging is correct, we’ve got you covered.

Drop us a line and we can make sure your investment property is optimised for returns.

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And if you’d simply like some expert guidance and support or if you're looking for valuable property investment, buying or selling tips, tricks and advice?

We’re ready and waiting to answer all your questions!

Plus, check out these other handy articles on our blog:

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We Connect Property are your local property market specialists with over 21 years’ experience in buying, selling and managing property in southern Adelaide.

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We’re ready and waiting to offer expert guidance and support when you need it most, and answer all your questions about property investing.

Give us a call on 0403 799 983 today, or drop a line to sales@weconnectproperty.com.au - we can’t wait to chat!

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DISCLAIMER: All recommendations made by We Connect Property are general in nature and not to be relied upon as legal or financial advice. To ensure accuracy, we always strongly recommend seeking independent, professional advice tailored to your specific situation before making any investment or financial decisions.