are St Kilda rentals soft now.. should I drop my rent?

I had a tenant paying $295pw for a 1BR unit in St Kilda. He vacated a month ago so we advertised but had no takers. So 2 weeks ago we dropped to $285pw but still no takers. So last week we dropped to $275pw. I said to the PM I'd like $275pw for the first 6mths with the tenant having an option to renew at $285pw for the following 12mths. This is so my lease doesn't expire at a bad time. I want it to expire on February 1st when the market is busy.

There are 2 other apartments in the same block available for rent. One is fully renovated asking $310pw, the other is similar to mine asking $275pw however both of them are on ground floor and mine's on the 3rd floor so better privacy and security.

So PM emails and says we've had 9 open for inspections and she's got an applicant asking for a 17mth lease at $275pw. I'm reluctant to accept such a long lease at such a low rent but maybe the market is soft now?

Does anyone else think St Kilda rentals are soft now?
Should I take the 17mth lease at $275pw or give a 12mth lease which expires next July (bad time to find a tenant) and then try to increase it if the market is better?
 
Well if you wait two weeks to get someone then you have just lost your increase
Also if the higher rent only stays 12 months you'll have re letting fees and so forth
Take the 275
 
Hi dex,

I agree with strongy,take the 275$.

I'm finding the market pretty soft in my suburb as well and have dropped the rent from 220 to 200 but still vacant.

My unit is going on the market this week,under performer re:cg but that said i could hold and wait for the billion dollar rail upgrade that's approved,but i'm not.

My unit is cf when tenanted but i need cg as well.

Anyhow again,dex take the 275$,i only wish my 1 bedder was in St.K.

Good luck with it:)

Cheers Spades.
 
I had a hard time renting my 2br St Kilda East 1950's pad in September 2013 which had been on $400 for over a year, started at $420 rented at $370. I didn't have a dishwasher and an an updated kitchen with existing whitegoods, but not renno'd.

Would probably go with Hocking Stewart next time as they have a bigger presence in the area (went with Whiting & Co - who were average with the quality of their work).

The feeling I had at the end of that exercise was mild relief!

Good luck!
 
Well if you wait two weeks to get someone then you have just lost your increase
Also if the higher rent only stays 12 months you'll have re letting fees and so forth
Take the 275

Don't forget Banks take the rental figure, not profit and loss at EOFY.
This can effect future Serviceability.
Been in the same boat recently, went with the reduced rent option, had to drop 35Pw due to bad rental time and poor market interest, slightly effected serviceability.
 
Hi buuckerooni,

1950's pad,art deco?

Anyhow,how long did it take to rent?

St.k and surrounds are highly rentable market,maybe a radar of things ahead,eg:slowing down,stagnate for awhile?

I dunno with all things considered ie:low rates,gubberment,loss off jobs,out sourcing,more fhb's etc etc.

Cheers Spades.

Ps.Maybe i'll hold onto cash until defaults are on the rise ;)
 
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