Tips & Solutions


Owning commercial or residential rental property comes with many responsibilities, including understanding rent increase laws.

When you own a rental investment property, ensuring you receive the best annual return for your investment is crucial to the long-term viability and profitability of your investment. As it is an income-producing asset, it is important to carefully consider when it is time to raise the rent to continue meeting your investing goals.

Rent increase laws

Whether you are a property investor, a landlord, or a self-managing property owner, it is important to comply with landlord-tenant laws. Guidelines for how to increase rent and how much rent can increase at once are important parts of the rent raise law. Knowing what the average rent increase is in your market is helpful in determining new rates. 

The laws differ by region, so make sure you are following the local guidelines for your rental properties.

A good property manager can guide landlords in the right direction. So, if you are not currently working with one, you may wish to reconsider. Skilled property managers carefully calibrate rents to ensure they are not being raised unnecessarily. They understand landlord-tenant laws and will fairly apply them to keep your tenants happy while producing the best return on your investment.

Rent increase guidelines

Tenancy laws outline how often landlords legally can increase rent, so they should be a point of reference at all times. There are some situations when increasing rent is appropriate.

1. Your property is undervalued

Property valuations are an important part of establishing rents for tenants. They should be conducted as part of the purchase of a property to ensure you are paying a fair price for the property and to help establish rental rates for tenants. It is advisable to conduct a valuation every two years at a minimum for the duration of your ownership of the property. Market value can shift as much as 25 per cent in a year, so periodic valuations are a great barometer for knowing when and how to increase rent.

2. Your rent is out of alignment with that of comparable properties

Real estate markets shift from one month to the next. And, it is important to ensure your property’s rents align with those of similar properties. Keeping rents reasonable when vacancies are plentiful will help ensure you have renters, and pushing them up during times of low vacancy availability can help increase your profits.

If your renters have a fixed-term agreement, rent increases must be spelled out in the agreement. Renters with periodic agreements can have rents raised at any time with a 60-day notice, and there is no limit on how often landlords can raise their rent.

How to increase the rent

Once landlords determine a rental increase is in order, they are required to provide a rent increase letter to tenants as part of rent increase laws.

Rent increase letters should include:

  • Tenant’s full legal name
  • Address of the rental property
  • Landlord’s name and contact information
  • Reason for the rent increase
  • The current cost of rent and increased rent amount
  • The effective date for the rent increase

Landlords should request the tenant acknowledge in writing that they have received the notice of rent increase. Tenants who oppose the rent increase should provide a notice of intent to vacate with their last date of occupancy in the rental unit. Letters can be hand-delivered or sent via certified first-class mail with return receipt.

The bottom line

Keeping the lines of communication open with tenants and fostering a good relationship are the best ways to minimise the impact of rent increases. Ensuring your tenants are treated fairly is one of the most effective ways to meet your investment goals. If it all feels overwhelming, consider reaching out to a property manager who can represent your best interests.


Jaime Pratt
A Senior Property Manager and Director with 20+ years’ specialist experience, Jaime is an expert negotiator who consistently achieves outstanding results for her clients.