Are you a landlord ? Looking to benefit from increasing the rental prices of your property?
Then you should be glad to know that the new rent cap law that has been announced on 18th December 2013 has shifted the general balance of power to the landlords who now hold greater power than ever before when it comes to increasing the rental prices of the properties. According to this new decree, rental prices can be increased during lease renewal with the tenant. A landlord can also increase the renting prices as soon as the current rental rate for the property gets to 11% below average rental rate in the market.
This is a sharp rise compared to preexisting rate of 26% needed under Old Rent Cap. The new decree also announces a 15% reduction in the benchmark when it comes to rent increase. This actually makes it easier for the tenants to increase the rent with a lower benchmark during lease renewal.
There are a number of things that you can actually do as a tenant if you are looking to boost the rental prices. These are some of the trending ways that you can use to make your property worth huge rents.
- Firstly, learn everything there is to know about the new rules relating to increase of rental rates during the renewal of the lease term. Here is a brief note on the rental increase that is permitted by the new law.
- No rental increase is allowed if the current rental rate is less than 10% and below average market rent rate.
- Maximum 5% increase on rent is allowed if the current rental rate is anywhere from 11% and 20% and is below average market rent rate
- Maximum 10% increase on rent is allowed if the current rental rate is anywhere from 21% and 30% and is below average market rent rate.
- Maximum 15% increase on rent is allowed if the current rental rate is anywhere from 31% and 40% and below average market rent rate.
- Maximum 20% increase on rent is allowed provided the current rental rate is greater than 40% below average market rent rate.
- Make sure that you use the Rental Increase Calculator offered by RERA in Dubai as it can help you to determine the exact rental price that is applicable for your property. The Rental Increase Calculator has now been updated to accommodate the rules in the new decree associated with the rental increase. Having the rental calculator handy will always place you in a better position to demand the rental rate that you have been ideally looking to ask from a tenant. The calculator also helps to ensure that you do not accidentally ask for a lower rental rate from a tenant.
- Make sure that you always keep track of the lease renewal dates so that you are well prepared to increase the rental rates at the specific time. You should also notify the tenant beforehand about the upcoming date on which the lease rate is to be increased.
- The rental rate of a property would depend a lot on the area in which your property is located. So if you are planning on getting a new property that you would like to offer for rent and earn a good income from that, it is advisable that you choose an area that can offer you substantial returns. Average rental rates are relatively high for all notable areas and can offer you excellent opportunities to earn great returns.
- The rental rate that you can ask a tenant would also depend a lot on the quality of the premises that you have to offer. So make sure that you have a well kept and well-maintained apartment that you can offer for rent. Check for any damages to the property and make sure that you do the proper repairs in time as this will place you in a better position to demand huge rental rates from a tenant.
- A two bedroom apartment would naturally draw a greater rental rate than a one bedroom apartment. Therefore make sure that the property that you have to offer comes with multiple bedrooms so that it can easily help you to draw greater rental prices.
- In many cases, landlords may choose to have a contractual lease agreement drawn in advance at the time of first leasing the property which clearly states the rates at which the rents are likely to increase in the future. Such an agreement also helps to avoid any confusion or disagreement later on in relation to the rental increase. So if you want, you can also prepare such a document in advance and get it signed by the tenant so that the rental increase procedure goes smooth and hassle-free.
- The rental prices of a property can also be higher if it comes with a lot of additional amenities. Therefore you can easily demand a higher rental price provided you can offer additional features such as a swimming pool, a garden area, free Wi-Fi, water supply, tennis court or playing area, fitness classes, sauna and Jacuzzi as well as other facilities. Having such amenities included with your property offers you a better position to earn huge profits from rents.
- Make sure that you carry out renovations and refurbishing from time to time to maintain your property clean and beautiful. A property that is aesthetically beautiful is certainly going to fetch a higher price from prospective tenants. You can also boost your rent rates in every few years to meet the current market prices that are in line with the quality of the apartment that you have to offer.
- Stay abreast of the latest developments from the world of real estate as it can help you to come up with effective business strategies to boost your property’s rental prices. If you travel or shifting to UAE, log on to Storat, find the best properties from property owners for buy & rent.