Has rent ever reduced..??

G'day ...trying to learn from all the experienced people here...

I am considering to buy my first Ip....based on expected rentals , I have worked out what my out of pocket expenses might be...all looks good.

However if interest rates drop...I will have a lesser dent in oop expenses and I will be even happier.

But then do rents too fall accordingly ?? Or can I keep the rents as they were when interest rates were high.

Besides interest rates and IP related expenses..are there any other expenses I should consider that would increase my oop burden significantly..??

Also are there other means that can reduce my oop expenses ?
 
rents do go up and down depending on supply and demand.

eg a unit i have owned for nearly 10 yrs rented for less a few years after i bought it due to an oversupply in the market place. It sat vacant for 12 weeks at one stage due to a number of factors.

Over the past 5 years there has rarely been a vacancy though and the rent keeps climbing. Low vacancies in Brisbane recently have helped.
 
We have dropped an asking rent by $10 or $20 per week a few times over the past 28 or so years, when the pool of available houses has been much bigger than it is now.

We have done it because we do rely on the income and we would rather have $280 per week (dropped from $300) than nothing.

It does make catching up that little bit harder, but it is better than an empty house. Wouldn't do it now, but those times will come again in the normal cycle of things.
 
By increasing the rents in line with the market this is unlikely to happen.

I try to keep rents $5-10 under the market so rental vacancy is rare. Worst case for me was 6 weeks...reduced rent by $10 dollar and tenant was found.:D
 
Chrome,
Yep.. rents can do go down, but in my experience, not by much. $10 or $20 drop in rent makes a lot of difference. Next few years are generally forecast for good rent increases. A few years back, many of us went "years" without any significant increases...but we had good capital gains ...That's the cycles.

LL
 
In the current climate, I can't see this happening. There was a glut of investment properties when I started investing 12 years ago and had to reduce a couple of my rentals. In one case I reduced one unit from $240 to $175 but this has now gone back up after a renovation to $295. I hope to increase this to at least $320 when the lease is renewed in October.
 
Like the others have said, the rental price is guided by supply & demand. If there is more demand than supply then the rents will rise. When there is an oversupply of rentals then the rents will lower. However in saying that, they do not ever go down by a lot. At the moment rents are steadily rising in most areas, which is good, so the likelihood of rents going below what the currently are is minimal.
 
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