This review we've decided to again raise the rent for our property by less than the market average, but it's still a hefty 15.5% rise from the current $450 per week to $480 from 1 June and then to $525 from 1 Dec. I'm sure our tenants will complain about this rent hike and try to negotiate a smaller increase, but I really don't want to let the rent fall too far below prevailing market levels. Even when the full increase comes into effect in December the rent will only be 91% of the average rent for similar properties in this area as of last December, and I'm sure rents will have risen further by the time the increase comes into effect at the end of the year, given the low vacancy rates in Sydney, the slump in new home construction, and record high immigration rates with Sydney the destination of choice for the majority of immigrants to Australia.
When we first purchased the property we set the rent based on expert advice from local rental property managers, and the rent was 98% of the relevant market average. Since then our rent has slowly fallen behind the curve, as shown below. Consistently getting 10% less than market rent is the equivalent of having the property vacant for 5 or 6 weeks of the year.
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