What is a fiduciary responsibility and what does that mean for your rental?
Why We Recommend Setting Market Rent for Lease Renewals
As property managers, we often receive questions from landlords about our recommendations on rental pricing. Comments like "They are good tenants; I don’t want to increase the rent," or "That’s too much—how did you arrive at that figure?" are common. While we understand the desire to maintain good tenant relationships, there are several critical reasons why adjusting rent to match the current market rate is essential for the health of your investment.
Our Fiduciary Responsibility
As your property management team, we have a legal obligation to act in our client’s best interest and if we don’t, we are in violation of the Property Occupations Act 2014. This includes providing advice based on current market data and trends. Our goal is to help you make informed decisions that protect and enhance the value of your investment. By recommending market rent, we aim to fulfill this responsibility diligently.
Maintaining Property Value
Keeping your rental prices aligned with the current market helps ensure that your property maintains its value. Undercharging rent can have long-term implications on both the perceived and actual value of your property. Regular adjustments help protect your investment’s worth.
Ensuring Financial Health
By setting the rent at the market rate, you maximize the return on your investment. This approach ensures that you are receiving fair compensation relative to the current rental market, which is crucial for the financial health of your investment portfolio. It also provides a buffer against inflation and interest rate market fluctuations.
Empowering You as the Owner
While we provide professional recommendations based on thorough market analysis, you ultimately have the authority to decide the rental price offered to your tenants. Our role is to equip you with the necessary information and insights to make the best decision for your property. You have every right to instruct us on the price to offer, and we will respect and action on your decision.
Stay Connected with Us!
We hope you found this article helpful! If you have any questions or would like to discuss your property needs, we're here to help. Feel free to reach out to us via our Contact Us page. Whether you prefer a phone call, a chat over Teams, or meeting for coffee with Bronwyn Evans, we're ready to assist you.
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