Great question! Property managers don’t simply pluck a figure out of thin air. When recommending a rent adjustment, they draw on several sources and factors.

The first step is usually to prepare a “comparative market analysis” (CMA). This report looks at similar properties that have recently been leased, both within the managing office’s portfolio and across the broader market. Property managers also rely on data from trusted research providers such as Cotality (formerly CoreLogic), along with insights from major online portals including realestate.com.au and Domain.

A good property manager will present landlords with this evidence — recent lease results, asking rents for comparable properties, and current vacancy rates — to justify their recommendation. They’ll also seek input from the landlord about expectations around a fair rental return.

Beyond market data, property managers and landlords will also consider tenant-related factors such as the length of tenancy, payment reliability, and how well the property is maintained. If these boxes are ticked, many landlords prefer to settle on a fair rental adjustment that supports stability rather than push for every last dollar.

That said, investor circumstances vary. Some long-term investors (such as members of a self-managed super fund) might value tenant security over small rent rises of $10-$20, while “mum and dad” investors balancing investment property loan repayments may prioritise higher yields – and therefore will seek some extra rental dollars.

Seasonal demand can also influence timing. For instance, reviews in January, a peak moving period for many Aussies, may deliver more substantial increases compared to mid-winter, when rental demand is typically softer.

Finally, any adjustment must comply with state or territory legislation where the investment property is located. Most jurisdictions regulate how often rent can be increased (commonly once every 12 months), and property managers are required to provide tenants with the correct notice in writing before an adjustment.

For more insights into how rental adjustments are determined, reach out to your local Raine & Horne Property Manager for expert guidance.