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Money Expert - Diana Clement - Financial Planning, Career, Investing, Economy, Property - MSN NZ

Help! My landlord wants to increase the rent

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It's a tenant's market right now, which means that you can bargain the rent down if you're savvy. There's an old adage: if you don't ask, you don't get.

Before you think "yeah right", consider this: there is a short-term glut of rental property on the market right now and that makes it a good time to either shop around for a better rental property at the same price or to ask your landlord for a reduction.

Landlords will seek annual rent increase. But in today's market you should be firing the shots.

Most landlords budget on the property being empty up to four weeks a year. So by staying put, you're doing your landlord a huge favour. What's more, if you move they'll probably need to do some work to fix the place up before they rent it out again and will have to pay for advertising.

If you're a good tenant and you pay your rent on time and keep the property in good order, then tell your landlord so and make sure you're rewarded for it. Most tenants aren't as good as you.

Now's the time to read up on the basics of negotiation and arm yourself with some facts and figures, such as:

The number of properties for rent listed on Realestate.co.nz across the country jumped from 4818 on May 5 to 6174 on September 15. That's huge. If you're a landlord competing against all of that extra competition, you might just want to keep an existing tenant.

Then you need to:

  • Get lists of similar houses to rent in your area from online sources, newspapers, and rental management agencies and find out what the going rate is.
  • Visit several other properties to get a feel for how your rent compares.
  • Check the market rent information on the Department of Building and Housing's website. It's very specific and will give you the average rent for different types of properties in localised areas.

Now start by putting your case together in writing and then call your landlord or property manager and explain what you're looking for. It's a good idea to:

  • Follow up in writing, by mail or e-mail, and
  • Be prepared to follow through and look for a new property if your requests aren't met.

Negotiation isn't blackmail and going in with threats to leave like a bull in a china shop won't usually work. Try saying: "I realise I could save $30 or $50 a week by moving. I wonder if you could drop the rent please." Taking a friendly positive approach pays dividends.

It's better to connect with your landlord and look for a win-win situation. Have a bank of "what-ifs" up your sleeve such as: "what if I agree to a six-month fixed tenancy" or "what if I do the lawn mowing for you in return for a rent reduction".

In a rent negotiation you must have a number of points that can be discussed and sometimes modified. It may be that if you can't get a rent reduction you may ask for:

  • Improved insulation — which many landlords can get subsidised by the government.
  • The installation of a heat pump or HRV system — which is becoming increasingly common in rental properties.
  • Draughty windows and doors to be upgraded.
  • A new stove or dishwasher installed.
  • Off-road parking facilities such as grass pavers put in.

Finally, be realistic. Your landlord is in the business of providing rental property. They don't run a charity.

Have your say: is your landlord charging you too much?

Links:

  • Community Law Centres
  • Department of Building and Housing tenancy pages
  • Flatting 101

  • User comments
    Don't forget that this is almost a year and a half old, it's 2010 now, Not all of us are tax dodgers, it costs me more to own the rental house, the rent is less than a mortgage, never mind rates, insurance, there was an article in the herald a couple of weeks ago saying that it is cheaper to rent a house than to own one, some one has to own them to rent them out. We actually do lose money even the tax benifits don't cover the loss. I know that when I retire there will be no super annuation so I am building up now. If there is a capital gains tax then that will be built into the cost of my retirement planning. There are more tax dodges being self employed and it is cheaper too than owning investment property.
    Some of the comments made show how ignorant some people are about properties, there costs, maintenance, insurances, rates etc. The average Landlord makes about 2.5% net on their investment, and rely upon the increase in value for an eventual return. The proposed Capital gains Tax means that Landlords will have to make a reasonable return on their investment instead relying on the gain in value, and a lot will sell off their properties causing a shortage. To get a reasonable return coupled with a lesser amount of available properties will mean about a 100% rise in rent in most cases. The government have got it wrong, and so have those who have naively point the finger without having any knowledge about the matter.
    ... if you want to moan about the landlord , you'll find the banks are the biggest theives . I went to change $10.00 aussi and they wanted to charge me $5.00nz to do it ....
    bollicks landlords are greedy tax dodgers. some have purchased they investment properties as super ages ago and have no or small morgages but still charge like wounded bulls. they bludge off the tax office they see their property increase by 10 to 12 % a year and when they retire and sell dont pay tax on the profit. In some cases they dont do any maintaince and then withhold bond to make repairs or up grade.
    I would say dont forget if your landlord hasnt increased the rent for a year or more it would probably be unrealistic to ask for a rent decrease. the comments about the tenant having all the power is not that accurate in Taranaki, I recently advertised a rental 1brm and had 20 or so enquiries so there is still plenty of demand granted not as much as 2 years ago when my ph would have rang off the hook. rates have just gone up 10% in taranaki mortgages are fixed at 9.3 tenants are under the impression that we are rich but they are the ones eating KFC not us. asking your landlord politely would be not out of the question if your looking for cheaper rent something may be able to be worked out. I will be holding the rents the same as last year but when the rates increase takes effect they will rise next year. who I am looking after.
    Unfair to landlords, we pay mortgage and some other expenses necessary for the house. Its bias
    Moving from the Pahiatua to Feilding saw the rent rise from $175 to $350 per week. In either location we were unable to get an accomodation supplement due to our income being above the area 3 limits. However if I was in the middle of Auckland or Wellington (area 1) on the same income and same rent I would be eligible for some accomodation supplement. The comment from WINZ that there are more costs to living in the cities does not wear as the bigger population base in these places should create more competiition and therfore more competitive prices unlike Pahiatua where there is one overpriced medium sized grocery shop.
    My landlord gave us a dishwasher when we asked for one and charges us $5 a week extra on the rent. That's a lot cheaper than renting one or buying it on HP.

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