Long-term investment beats short-term gain…

Long-term investment beats short-term gain…

Amer Siddiq, Managing Director of Property Portfolio Software, talks about rising rents.

No doubt you will have seen the countless newspaper headlines over the past months about how rents have been soaring in the current economic climate. This week, the Consumer Prices Index (CPI) and Retail Prices Index (RPI) both rose, hitting CPI at 5.2% and 5.6% respectively. The cost of living is going up all the time, and rents are following.

If you are a landlord, it is easy to think that if you haven’t increased rents then you are missing out on extra of income. But as always, be careful when dealing with the sensitive issue of money.

Whilst I do accept that rents are higher, I am certain that in the vast majority of cases rents are only increased as a result of rents going up when properties are re-advertised for re-let. In other words, landlords who have existing tenants in properties are not generally raising rents.


Quite simply because they do not want to ‘rock the boat’? If you have a good tenant who is always paying on time, would you want to risk them looking elsewhere?

As demand increases, rents will inevitably follow. Houses prices have rocketed in recent years, so naturally rents will be working to catch up.

But what can work well in your favour is to drop your tenants a little reminder to say, even though the AST says that a rent increase is due, we are holding your rents the same. It is amazing how much loyalty a simple letter like this can create.

At the end of the day, tenants hold the purse strings for our portfolio. I’d rather have a hassle free tenancy with guaranteed rents rather than run the risk of a good tenant leaving. Finding another reliable tenant costs time and money.

So, in summary – really think twice about when is the appropriate time to increase rents. Tenants should appreciate the rising cost of living and letting out a house, and a landlord must naturally keep an eye on market-level rents, but keeping a long-term tenant in a property can be better than aiming for short-term gain.

About this Blog:
This blog has been provided by Amer Siddiq from Property Portfolio Software, who provide software to help landlords be better organised.

For more information, or to join the NLA, visit: www.landlords.org.uk

One thought on “Long-term investment beats short-term gain…

  1. I must agree with this post. It is short sighted to be greedy on rents, voids are far more expensive than not having the maximum rent. Plus the more empty periods you have the more time you have to spend managing your portfolio (e.g. marketing, doing viewings etc). So even if you do end up with slightly more income, it doens’t mean your hourly rate will be higher. I consider my time to be pretty valuable.

    My strategy is not to be greedy with rents and to try and keep tenants for as long as possible. It has worked pretty well so far.

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