Landlords morally obliged to pass on rate cut

[steveadl]

Rate cut may help with rent - for a while

TENANTS across Australia look set for a short-term reprieve from rising rental prices, with analysts expecting landlords to pass on the benefits of interest rate cuts.

......

http://www.news.com.au/business/story/0,27753,24514537-462,00.html

OK, what I want to know - who on earth are these 'analysts'?!

It's pretty scary if there actually are any 'analysts' who know this little about how the market works and what a stupid statement this is. On the other hand, they don't quote anyone so perhaps just the usual media fluff.

When interest rates are rising, we are warned not to increase rents to make up for them. Now they're going down, we're being told we should be decreasing them.

Well you can't have it both ways guys, which is it going to be?

 

[Dis]

When interest rates are rising, we are warned not to increase rents to make up for them. Now they're going down, we're being told we should be decreasing them.

Well you can't have it both ways guys, which is it going to be?

But still worth trying it on !

 

[BV]

My rents are only going to go up, up, up, up. As fast as possible.

Unless your tenants go out and buy their own place and you are left with no tenants.

This possibility doesn't worry me because vacancies are extremely tight right now and the doubling of the FHOG is only for 9 months so I doubt that it will put much downwards pressure on rents.

cheers

 

[skater]

This possibility doesn't worry me because vacancies are extremely tight right now and the doubling of the FHOG is only for 9 months so I doubt that it will put much downwards pressure on rents.

cheers

Precisely my point. AND when you see TV reports that tell you the best thing to do is to liquidate everything & rent (can't remember which show it was, but I did hear this last week) because Australia is in the worst financial crisis most people will ever see in their lifetimes. There are people out there who believe this kind of stuff. I don't see big rental vacancies for a little while yet.

 

[aliasforsydney]

"It will also help pay for other essentials such as medical, clothing, transport, education and life's necessities."

Like beer and cigarettes

They've also got other necessities too... Nintendo Wii's, XBox 360's, Nintendo DS's and their accessories and games are sold separately so that's even more for them to fork out

Another thing that we've got to keep in mind is that unlike so many greedy LL's, they don't have money trees growing in their backyards

Sharing is caring, so how about any time an expense changes, the rents change in the same way... Oh wait, that's the greedy LL's talking again. You can't expect the tenants to afford extra $$ when the holding costs go up. Once again, the tenants aren't lucky enough to own any of their own money trees...

 

[WinstonWolfe]

Can someone tell the bleeding hearts it ain't rates that matter per se.
It is

(rate x funds borrowed) + LMI + opportunity cost of owner equity + local govt rates + state govt stamp duty + fed govt marginal tax rate + risk premium of property value decreasing + (risk of financial loss via property damage and loss of rental pmt by tenants x tenancy authority bias in favour of tenants)

When the bleeding hearts encourage a net reduction in that equation, a rental decrease will be justified.

 

[jasper]

OMG!!! What a joke!!! How bout the tenants can find out what it is like to be a landlord!!! Repairs, council rates, late payments, gardening, updating... That I would like to see.

 

[DavidMc]

Can someone tell the bleeding hearts it ain't rates that matter per se.
It is

(rate x funds borrowed) + LMI + opportunity cost of owner equity + local govt rates + state govt stamp duty + fed govt marginal tax rate + risk premium of property value decreasing + (risk of financial loss via property damage and loss of rental pmt by tenants x tenancy authority bias in favour of tenants)

When the bleeding hearts encourage a net reduction in that equation, a rental decrease will be justified.

Hahahha great!

I'll add:
+ maintenance
+ water/sewage rates (Victoria)
+ property management costs
+ accounting costs
+ time and energy
+ profit (or potential for profit) to provide an incentive

(Unsure if that last one is allowed)

 

[IndexFund]

http://au.youtube.com/watch?v=-h3RkgJw25E

 

[crc_error]

I'll tell the tenant that since I didn't pass on the interest rate increases to them, I wont be passing on the rate reductions.

I'll also indicate to them I haven't passed on the increased value of the property to them either. Infact since the property value has increased, so does the rent!

Its funny, cause rent only covers 1/2 the interest costs on the full property value, so why would the tenants expect a reduction?

 

[natmarie73]

Why don't this mob of retards spend their energy on getting the banks to pass on the interest rate deductions to landlords before attacking the landlords.

I don't have a moral obligation to anyone besides myself.

What planet are they living on exactly?

 

[skater]

What planet are they living on exactly?

The planet "Delusional", or perhaps "Wishful Thinking".