This is a business decision only you can make and nobody knows your business better than you! As a business, the income has to exceed the costs if it is to remain viable.
Here are a few things to consider to help you answer the question:
- Where the costs of running the business (e.g. mortgage) increase, an increase in the income (rent) is justifiable
- Take care not to increase the rent above the market value – you could loose a good tenant or the tenant could legally challenge any proposed increase
- It is difficult to put a price on the value of a good tenant – if you have a good tenant, try to keep rent increases to a minimum
- Accept that the business of letting the property may not be viable – you may be unable to increase the rent sufficiently to cover the overheads
Further Reading
Questions landlords need to ask before increasing the rent {Jungle Property blog post}
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