Property is naturally entropic. If you leave it unattended, it will fall into disrepair. Properties require continual maintenance to ensure they remain in good order. But what many landlords forget to factor into their equations is the need for a sinking fund. A newly refurbished property only has a limited lifespan. Within 10-15 years, kitchens and bathrooms will need to be replaced. Boilers have a lifespan of around 7-10 years, flooring and decor 3-5 years. This is before you factor in any external work such as roofs, chimneys, fascias, fences. The cost of these run into thousands. 

It is because of these always present and ever-increasing costs that I review rents every year. Note, I use the term review, and that is exactly what I do. I start by doing market research, which essentially means I assess what the current market rent is and level of demand. 

I next check how long the tenants have been with me, when their last rent increase was and by how much. Then I look at inspection reports and the maintenance log and judge how the property is being looked after. After that, I check their payment records and note any periods of arrears. 

This process is about working out how much I value the tenants and what their loyalty means to me. I then calculate any works that may be required to offer the property to a new tenant and cost this along with the time frames that would be required and add in the cost of this void period (including loss of rental income and the liability of the utility bills).

The end result is likely two different numbers, quite a distance apart. A fresh property to the market costs more, because it cost more to get it there in that condition. A current, good tenant deserves a discount on market rent because they are not getting a fresh property. To me, that number equates to around 10-15pc below market rent. That is what their loyalty is worth.