Rent increase versus retaining a reliable tenant for a two-bed Sydney townhouse

L

luca_figures

Homeowner
Market asking rent for comparable property appears to be around A$11,880 for the relevant period, versus our current rent of about A$9,684. The tenant pays reliably and takes good care of this two-bedroom Sydney townhouse.

Would you move closer to market rent or make a smaller adjustment to reduce the chance of turnover, vacancy and refurbishment costs? I also want the review and notice to comply with current NSW rules without damaging the relationship.
 
I would put a value on the known tenant before choosing a number. Estimate what even a short vacancy, advertising, changeover work and your own time would cost, then compare that with the extra A$2,196. A below-market increase can still improve the return while recognising reliable payment and good care. Give a clear explanation and confirm the current NSW notice and timing requirements before sending anything formal.
 
Are the A$11,880 comparables genuinely similar townhouses, and are they asking rents rather than completed lettings? Condition, exact location and included features can make advertised figures misleading.

I would not automatically keep the increase tiny, though. The gap is material, and postponing every review can leave you facing a much sharper adjustment later. First establish a defensible range, then decide how much of a retention discount the tenant’s history merits.
 
Theo’s distinction between advertised and achieved rent is important. I’d gather a few close comparables, note the tenant’s payment and maintenance history, and calculate the cost of one realistic turnover scenario. Then approach the tenant before issuing the formal notice: explain that a review is due and invite a response, without implying that the increase is negotiable if it is not.

Also verify the latest NSW rules for frequency, notice and bond handling from an authoritative local source. The bond should remain separate from the rent discussion, and if the tenancy ends, vacancy and deposit procedures need to be handled correctly.
 
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