Traditionally, demand for rental properties in Australia was dominated by the prominence of six month or twelve month leases. As the cost of living steadily rises, so does the cost of moving. As a result, today’s tenants are leaning towards longer tenancies. Most tenants prefer to secure at least twelve months in a fixed term agreement, in order to minimise the financial burden and inconvenience of moving house too regularly.
Securing a long lease also benefits landlords, as long tenancies will guarantee a fixed rate of rental return for a longer period of time. This offers security and certainty and minimises the costs associated with re-advertising in between tenancies, by slowing tenant turnaround.
When a lease is nearing expiration on the original negotiated fixed term, it is standard practice to begin negotiating a new term. Provided the terms of the tenancy have been agreeable for both parties, good practice dictates negotiations will begin around three months prior to the final day of the lease end.
This period of negotiation is an ideal time to consider the current rent paid, compare market rates and trends of the past twelve months and to assess any maintenance that the property may require in the coming year. A good agent will work with you to assess the potential rental increase on your property, while of course remaining competitive with market and tenant expectations.