A well-timed rent review can protect an investment property's income without creating unnecessary vacancy or tenant turnover. In NSW, the legal framework sets when rent can be increased and how notice must be given. The commercial decision is then whether the proposed rent is supported by the current market and makes sense for the property.
The 12-month rent increase rule
For NSW residential tenancies, rent generally cannot be increased within the first 12 months of the tenancy. After a rent increase takes effect, at least 12 months must pass before another increase. The rule applies to both fixed-term and periodic agreements. Renewing an agreement or changing the agreement type does not automatically reset that 12-month period.
At least 60 days' written notice
A landlord or managing agent must generally give the tenant at least 60 days' written notice before the increased rent takes effect. The notice should state the new rent amount and the date it becomes payable, and it must be properly addressed, dated and signed. Correct timing and records matter.
Legal does not automatically mean commercially sensible
The maximum achievable rent is not always the rent that produces the best net result. A strong review considers genuinely comparable current rentals, the property's condition and features, tenant quality, lease timing, local supply, expected days on market and the cost of vacancy. Losing one or two weeks of rent can outweigh a small weekly increase for many months.
- Check the date the tenancy began and the effective date of the last rent increase.
- Compare the property with current, genuinely similar rental listings and recent leasing evidence.
- Consider the existing tenant's payment history, care of the property and likelihood of renewal.
- Model the benefit of a higher weekly rent against possible vacancy, advertising, letting and turnover costs.
- Allow enough time for the required written notice and keep a clear record of service.
Rent reviews and lease renewals are related, but not the same decision
A lease renewal can be a useful point to review the rent, but the rent-increase timing rules still apply. A property manager should check the tenancy history before recommending an increase rather than assuming a new fixed term creates a fresh opportunity to raise rent.
Frequently asked questions
How often can rent be increased in NSW?
For most NSW residential tenancies, rent cannot be increased within the first 12 months of the tenancy and at least 12 months must pass after an increase before another increase takes effect.
How much notice is required for a rent increase?
A landlord or agent generally needs to give at least 60 days' written notice before the increase takes effect.
Can rent automatically be increased when a lease is renewed?
No. Renewal does not override the 12-month rent increase rules. The tenancy history and timing of any previous increase should be checked first.
How much should a landlord increase the rent by?
There is no single percentage that suits every property. The proposed rent should be supported by current comparable evidence and considered alongside tenant retention, vacancy risk and the property's overall net return.
NSW Fair Trading — When and how rent can be increased
NSW Fair Trading — What landlords should know about rent increases