How to Handle a Landlord Who Wants an Unrealistic Rent Increase.
When a landlord wants a rent increase that the market does not support, the PM needs to provide clear evidence, explain the risks and recommend a more realistic position. Before anything is proposed, always check the current rent increase rules in your state or territory.
Most property managers have had the conversation.
The landlord believes the property should achieve significantly more rent.
Your market evidence says otherwise.
Simply saying "the rent is too high" is unlikely to change their mind.
The better approach is to bring the conversation back to legislation, evidence, risk and the likely financial outcome.
Check the legislation first.
Before discussing how much the rent should increase, confirm whether an increase can legally occur.
Rent increase rules vary between Australian states and territories and can change.
Check the current requirements covering:
how often rent can be increased
when an increase can take effect
required notice periods
prescribed notices or forms
rules applying to fixed-term agreements
how the increase must be calculated or explained
renter rights to challenge an excessive increase
Do not rely on what the rules were last year or what applies in another state.
For example, current requirements around frequency and notice periods differ between Victoria, NSW and Queensland.
Once you know the proposed increase can legally proceed, the next question is whether it makes commercial sense.
Bring the conversation back to market evidence.
A landlord may have formed their expectation from:
a neighbouring property
an online estimate
something another landlord told them
an advertised property
media reports about rising rents
That information may be relevant, but it does not necessarily establish the market rent for their property.
Use comparable evidence that considers:
location
property type
bedrooms and bathrooms
condition
features
parking
recent comparable rentals
current competing properties
The closer the comparison, the stronger the recommendation.
Explain asking rent versus achieved rent.
An advertised rent does not necessarily mean somebody paid it.
If a landlord points to another property advertised at $800 per week, find out whether it actually leased at $800 and how long it took.
A better comparison is what similar properties are successfully leasing for.
Put the increase into perspective.
Sometimes a landlord becomes focused on the weekly figure rather than the overall return.
For example, holding out for an additional $30 per week may sound worthwhile.
But one extra week of vacancy at $700 per week takes more than five months of that additional $30 to recover.
That changes the conversation.
The highest possible weekly rent does not automatically produce the best financial outcome.
Explain the renter retention risk.
A good renter has value.
Before recommending a large increase, consider:
payment history
property care
length of tenancy
current market alternatives
likely reletting costs
potential vacancy
advertising and leasing costs
the time required to secure another suitable renter
This does not mean rent should never increase significantly.
It means the decision should consider the whole financial picture.
Give the landlord your recommendation.
Do not simply provide comparable properties and leave the landlord to interpret them.
Give a clear professional recommendation.
For example:
Based on the comparable properties currently leasing in the area, I believe the market supports $650 to $670 per week. My recommendation would be $660 rather than $700.
The landlord may still disagree.
But there should be no uncertainty about your advice.
Explain what may happen at the higher figure.
If the landlord wants to proceed at a level you believe is unrealistic, explain the possible outcome.
That may include:
renter objection or challenge
losing an otherwise good renter
longer vacancy
reduced enquiry
fewer applications
repeated price adjustments
additional leasing costs
Keep the discussion factual rather than argumentative.
Do not confuse maximum rent with best outcome.
The goal is not always to achieve the highest number technically possible.
It is to achieve an appropriate return while considering vacancy, renter retention, property condition and current market demand.
An extra $20 or $30 per week can quickly disappear if the decision creates avoidable vacancy.
Document the recommendation.
If the landlord chooses to proceed against your recommendation, keep a clear record of:
the market evidence provided
your recommended rental range
the landlord's requested amount
risks discussed
any relevant legislative considerations
the final instruction
This becomes particularly useful if the decision is questioned later.
Sometimes the right advice is not what the landlord wants to hear.
A property manager is not there simply to confirm the landlord's preferred number.
Your value is in helping them make a better decision.
Check the legislation.
Look at the evidence.
Consider the whole financial outcome.
Then give a clear recommendation.
The landlord may still choose differently, but they should be making that decision with a realistic understanding of the market and the risks.