Negotiations are often a challenging experience in any field.
Everyone wants to get the best deal possible, so not everyone can…
When renting your property to tenants, getting the optimal rate (i.e., reasonable) is essential.
Otherwise, your income might be affected.
Do your research
You should prepare for the negotiation before you start it.
For example, you should also thoroughly understand the renter’s status up to the present day.
In other words:
- How much rent are they paying?
- How long have they been paying it?
- How well do they pay it? (I.e., is it always on time, the full amount, etc.)
- How many times has their rent been increased in the past?
These details may be hazy if you’ve bought the property with an in-situ tenant. But you still need to know.
And hopefully a lot of the key information was found during Right to Rent checks before the tenant moved in.
Information about the tenant could also be useful to know what they can afford.
They’ll often have given their income details when first applying to rent out the house, for instance.
Communicate clearly
You should be honest with your tenant and explain your reasoning for changing rent prices.
Some common reasons for increasing a person’s rent include:
- Their bad behaviour
- Inflation
- Changes in the market
- Someone else is offering more
- They’ve been on the same price for a long time.
All of these are valid reasons to increase their rent.
It’s best to provide context in this way, rather than demanding more rent without any explanation. Put this in writing, if possible, too.
Communicate honestly
Honesty is always the best policy. And this applies to rent negotiation, too! Y
Building positive rapport makes it more likely that the negotiations will go smoothly. This can make finding a compromise that works for both parties easier.
Deception is the wrong approach. It may even cause you to fall short of your legal responsibilities as a landlord.
Negotiate other terms beside rent payment
When you’re negotiating rent with a tenant, monthly payment is not the only bargaining chip you can use.
There are other terms related to your agreement that you could use in your negotiation.
This enables a compromise for one of the two parties. If they aren’t happy with the financial arrangement, they can be compensated in another way.
Examples include:
- Rental lease length
- Allowing pets in the property
- Decoration
- Service charge
- Ground rent.
Try to avoid the conversation becoming hostile
It’s in your interest to keep the negotiation as friendly as possible.
If you fall out, then your tenant could become a major hassle. They may start squatting or take you to court.
If need be, bring in a mediator to oversee the negotiations. This allows both parties to feel respected.
And it ensures you follow the correct procedure rather than hearsay about who says what.
Treat your renter with respect. Explain your opinion and make sure they feel heard, too.
Put your offers in writing
You should keep a clear written record of your negotiations. This avoids any disputes over what was agreed.
It gives both parties protection and makes the agreement binding. Speak to a solicitor for more guidance in this area.