How to protect your rental income from cost of living increases

By Carolyn Parrella | Published 25 March 2026 | Last Updated 19 October 2026

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When the cost of living goes up, some tenants may find it harder to pay rent on time. This can affect a landlord’s rental income. While rental risks cannot be removed completely, careful tenant selection, property management and good record keeping may help landlords reduce risks to rental income and support an investment property over time. This article explores six general considerations landlords may wish to think about, depending on their circumstances.

Why rental income is at greater risk today

Higher living costs are putting pressure on household budgets. This means some tenants may struggle to pay rent on time. For landlords, this can lead to late payments, unpaid rent and gaps in rental income. Many property investors also use rent to help pay their mortgage and other property costs.

Six ways to help manage disruptions to rental income

1. Start with thorough tenant screening

Tenant screening may help landlords identify potential issues early and make more informed decisions before entering a tenancy. A screening process should be considered alongside relevant tenancy laws, privacy obligations and the landlord’s individual circumstances.

What to look for in a tenant

• Positive rental history.
• Consistent on-time rent payments.
• Strong references from previous landlords or agents.
• Stable employment or reliable income.
• Good communication during the application process.

Potential tenant red flags

• Repeated late payments.
• Incomplete rental history.
• Negative references or unresolved tenancy issues.

2. Work with a property manager

A property manager may help landlords manage rental risks, depending on the services provided and the landlord’s circumstances. They often assist with:

• tenant screening
• reference checks
• property inspections, and
• compliance requirements.

They can also help landlords find problems early and keep clear records.

3. Conduct regular property inspections

Why inspections matter

Regular inspections can help to:

• detect maintenance issues early
• prevent minor problems from becoming costly repairs
• identify property damage quickly
• improve communication between landlords and tenants, and
• reduce the likelihood of unexpected end-of-lease issues.

4. Be strategic with rent reviews

Rent reviews are an important part of managing an investment property, but they need to be handled carefully. While market conditions may support rental increases, it’s also important to think about keeping a good tenant. A tenant who pays on time and looks after the property may be worth more in the long run than a higher rent followed by an empty property or new tenant costs.

Pros and cons of a rent review

5. Focus on retaining reliable tenants

Reliable long-term tenants can give landlords steadier income and fewer gaps between leases. A good landlord–tenant relationship often comes from:

• clear communication
• timely responses to maintenance requests, and
• established tenant/landlord responsibilities concerning the property.

Benefits of keeping tenants

6. Monitor early signs of financial stress

Warning signs checklist

• Rent payments arriving later than usual.
• Requests for payment extensions.
• Reduced communication or responsiveness.
• Maintenance concerns being ignored.
• Deteriorating property condition.
• Sudden changes in tenant circumstances.

Watching for these signs can help landlords act earlier and make better decisions.

Rental income disruption

Even with good tenant checks, property management and regular inspections, rental risks can’t be removed completely.

Landlord insurance may be one option landlords consider as part of a broader risk-management approach. Depending on the policy, it may cover certain rental income losses and tenant-related risks, but cover is subject to policy terms, conditions, limits, exclusions and eligibility criteria.

Before considering a quote or buying Terri Scheer Landlord Insurance, landlords should read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) and consider whether the product is appropriate for them. They should also review policy conditions, exclusions, definitions, limits, waiting periods and eligibility criteria. A quote does not indicate that a product is suitable for a person’s objectives, financial situation or needs.

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Checklist to help manage rental income disruption

These steps may help landlords reduce risk, improve communication and better manage possible rental income disruption over the long term. They do not remove rental risks completely, and landlords may wish to seek professional advice based on their circumstances.

• Conduct thorough tenant screening and reference checks.
• Review rental history for missed or late payments.
• Consider using a professional property manager.
• Schedule regular property inspections.
• Address maintenance issues promptly.
• Take a strategic approach to rent reviews.
• Prioritise retaining reliable tenants.
• Monitor for early signs of financial stress.
• Keep accurate tenancy records and documentation.

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