Local Property Market
The most important factor is how competitive your rental property is in the local market. You’ll need to consider the size, location, and desirability of your property and how it compares to similar properties in the same area. A good idea is to search for similar properties in the area on TradeMe and realestate.co.nz.
You should also think about how the local property market has changed, for better or worse, since you last set the rental rate. If the market is stagnant, then an increase might not be a good idea. If demand is high, however, then an increase may be warranted.
Read our guide to Determining Market Rent
Remember, property markets are highly localised, so it’s important to consider the particular circumstances of the area of your rental property. Use our city property management guides to deepen your understanding:
Improvements, Additions, Deterioration
You should also consider how your rental property has changed since you last set the rent. If you’ve made substantial improvements or renovations, especially if you’ve added an extra bedroom or bathroom, this may justify increasing the rent.
If, however, the property has deteriorated or needs maintenance, then this many not be right time for a rent increase.
Market Rent
You should also remember the laws surrounding ‘Market Rent’. A tenant can apply for a rent reduction if the rental rate for their tenancy substantially exceeds the ‘Market Rent’. Market Rent figures are calculated and published by NZ Tenancy Services using bond lodgement data broken down by area and property type.
Read more about Market Rent and how it is calculated
Got a great tenant? Consider what's good for them
If you’ve had no hassle or extra costs because your tenant is great, then it may be worth considering whether it is worth increasing the rent if it means they have to move out. What you lose in extra rent might be saved by not having to chase up late payments, having peace of mind, and only having to do minor maintenance work.
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not, and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.
