With the current freeze on rent increases due to end on 25 September 2020, some media outlets are predicting a sudden flurry of rent increases from landlords. However, choosing to increase rent is a complex decision and one that you should not take lightly.

The government announced a temporary freeze of rent increases on 23 March 2020, which was applied as law through the COVID-19 Response (Urgent Management Measures) Amendment Act, as a way to support New Zealander’s to stay in their rental properties during these challenging times.

As well as the freeze ending, as part of the Residential Tenancies Amendment Bill, from 12 August 2020, rent increases are limited to once every 12 months – a change from once every six months.

With so many changes occurring, it may be tempting to push through a rental increase immediately, but it is best to stop and consider some important points before you review the rent on your property.


  1. Increased Costs Are Not a Good Reason

Firstly, you cannot simply increase the rent because of increased costs associated with ownership – for example, the costs associated with ensuring your property will comply with Healthy Homes Standards, increased rates or insurance, or loss of income due to Covid-19 restrictions.


  1. It Must Be in Line with the Market

Rent can only be increased in line with similar properties currently being advertised as available for rent, so to help justify the rent increase and aid in discussion with the tenant.

It is helpful to take photos or get examples of other properties that have been listed at a similar rental rate as proof if the tenant is opposed to the rent increase.


  1. You Have to Be Able to Justify the Increase

Having proof to help justify the rent increase will likely cause a tenant to reconsider a decision to leave.

Especially as the cost to move out of a property involves a new bond (usually four weeks rent) plus the costs of having to remove their belongs from the property and relocate them to a new place.


  1. Advertise Just under the Going Rental Rate

In fact, by offering your property slightly under the going rental rate, you are likely to attract a greater choice of tenant from which to select. This increases the likelihood you will end up with a quality tenant who can and will pay on time every week, and who will look after your property well.


  1. A Very High Rent Is a Risk

The risk of listing your property with a very high rent is that you will have a high turnover of tenancies, which is never cost-effective.

You can put yourself at risk of a great financial loss very quickly, especially if a tenant defaults on the rent and tenancies need to be terminated through the Tribunal and evicted – this can take up to 6 weeks.

During this time, you lose income, plus there are often added costs of cleaning and rubbish removal, as well as the lost time of finding another tenant.


  1. You Must Provide 60 Days Notice

If you do decide to proceed with increasing the rent, you must provide the tenant with at least 60 days’ written notice of a rent increase.

The notice must be served in writing, say how much the rent is increasing by, and the day the increased rent is due.

More detailed information on rent increases and reductions can be found here.


Our experienced team of property managers are well versed in navigating rental laws and legislation. We can assist you in deciding on the appropriate rental for your property and can manage difficult discussions around increasing or changing rents with tenants.

Contact us today for an obligation-free consultation.