The year my rent jumped $120 a week, and the years it didn't move at all

One of my properties has had years where rent barely moved. This year it went up $120 a week in one step, and I could have pushed for more.

As a buyers agent who also holds property in my own portfolio, I test the assumptions I use with clients against what actually happens on my own numbers. This is one of those tests.

Rent on this property moved from $380 a week in 2018 to $390 in 2021, while vacancy in the area tightened from 6% to 1%.

Same tenant since 2021. Last year's review suggested a $20 increase. I passed on it, didn't see the point. This year the review supported $120, and I took it.

That wasn't even the ceiling. My property manager noted that if the tenant vacated, we could have gone to market at $150 to $160 for someone new. I checked that myself by running my own comparables before deciding. So it's not just one person's read on the market, and it lines up: there was more room than I used.

I didn't take it. A longer vacancy, re-letting costs, and the chance of ending up with a worse tenant weren't worth the extra $30 to $40 a week to me. That's not the market being generous. That's choosing a known tenant over squeezing the number as far as it'll go.

We model rental growth conservatively at TNG, around 4% a year. It's not a number we expect every single year to hit. Some years blow well past it, some years land under it. It's a low end assumption meant to hold up over a long period, not a target for any one review.

People tend to picture rental growth like compound interest. A steady percentage, year after year. That's not how it actually moves.

It's lumpy. Some years the market just doesn't support an increase, and pushing for one anyway is a bad read, not a bold one. Other years conditions tighten and a big jump is simply what the market is telling you, nothing aggressive about it.

That's why the conservative number matters. Plan on a fixed yearly rise and a flat year wrecks the math you used to justify buying in the first place. Plan conservatively and a flat year is just a flat year. A big one becomes a buffer, not something you'd banked on.

Look at this property in a flat year and it's nothing special. Look at it this year and it looks great. Neither one is the whole picture. The whole picture is both, over time.

One property, one story. I wouldn't assume every tight market plays out the same way, or on the same timeline. Vacancy eases. Years like this one aren't owed to you.

Worth saying plainly: modelling at 4% means you'll look conservative in a year like this. That's the point, not a failure of the model. Bet on optimistic growth instead and it works fine, right up until the year it doesn't, and by then you've already made the decision.

Don't judge a rental strategy by one year. It moves in fits and starts, and planning conservatively is what saves you in the quiet years, not what holds you back in the good ones.

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Disclaimer: The information in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It is not financial, legal, or tax advice. The Nelis Group accepts no liability for actions taken based on this content. You should seek independent advice from a relevant licensed professional before making any decisions and always confirm the latest rules and thresholds with your state revenue office or relevant authority.