Households to pay $300 for fire levy
- Thread starter ZachAnSel
- Start date
At the end of the day, everything gets passed onto the tenant. Land tax, interest rate rises, water increases etc. BUT as LLs we don't pass on any savings e.g. when mortgage IRs come down. I continued to keep increasing my rents even during the GFC when IRs were low. It's the way nature intended.
If the market will support it
Was catching with a mate who just got his first IP (and good on him I say). He was talking about rate rises and basically said that he will raise the rent every time it happens.
But what about the market rate?
Nah mate. I'm doing them a favour, and I need the cash to offset the rise in repayments.
I think when he was a property sitting empty he might change his tune.
Remember kids. You will only get what the market says you will get. Not what you need.
Now, off to make a mortgage repayment on a block of empty land. Again
If the market will support it
He was talking about rate rises and basically said that he will raise the rent every time it happens.
sounds good but the RTA prohibits that behaviour and in reality tenants will walk for the sake of a $5 increase, all fun things your mate will come to realise with time
Yep. I've sold my IPs to fund other ventures, but I'm trying to teach him. At the moment it's all the excitement that comes with it.
He's smart enough to learn in the first 6 months. As with most new investors it's all a learning curve, but good on him for getting started.
I always raise rent on yearly basis, but you right - only if the market support.If the market will support it
Was catching with a mate who just got his first IP (and good on him I say). He was talking about rate rises and basically said that he will raise the rent every time it happens.
But what about the market rate?
Nah mate. I'm doing them a favour, and I need the cash to offset the rise in repayments.
I think when he was a property sitting empty he might change his tune.
Remember kids. You will only get what the market says you will get. Not what you need.
Now, off to make a mortgage repayment on a block of empty land. Again
When I have discussion with tenants, when they receive the rent raise notification. What they do is :
1. Compare with other rental property available on the market
2. Cancellation fee for other stuff (phone, electricity, etc)
3. Moving stuff expense
4. Organise address changes related to correspondence
Once I've tenant who already organise overseas holiday on the same period their lease is expired. They have no choice locked for 12 months, even if the compare my property is $15/weekly higher to other unit in the same complex.
I don't think the "cost" of cancelling phone, electricity is a factor, but there is a HUGE PITA factor involved in all that and most people will stay rather than move due to a small rent increase.
However, you just cannot increase the rent due to your costs increasing any old time, which I think you are aware of. That is what a lease is all about. It locks you both in to a rent amount for a fixed period.
