Matusik Report - "don't expect rent rises this year"

[steveadl]

We've just put 2 rents up and another will go up in a few months. Guess as usual Adelaide just creeps along.

One point I do take exception with is people leaving the rent as is in fear of losing a tenant. I prefer to follow the example set by my (commercial) LL. Rent goes up every year and adjusted at renewal time. Granted I'm only in residential so far, but I can see the theory behind it and believe in it. To you it might only be $20pw, but keeping the rent at market and increasing whenever possible leaves you with the best possible return in the eyes of buyers and banks should you need to sell or wish to borrow more. Leaving rents too low/below market can hurt your asset values.

For this reason I'd rather let the property go empty for a few weeks if the tenant decides to leave due to market increase (though it hardly ever happens to us) than let them stay at a below market rent. In the end the few hundred $'s a year doesn't make a huge difference (especially the bigger you get), but the $xxpw you put in your loan applications/adverts when the time comes can make a big difference to your values/DSR. The bank doesn't care that the property was empty for 3 weeks between tenants 5 months ago (in fact they don't even know about it), but they do care if it's $30pw under market when your application goes in.

 

[Aaron Sice]

Not really, when vacancies were high it worked in the tenants favour.
Now it's the opposite.
I'm listing 1 today and the rent will be 15% higher

yes it is!

and when vacancies are high, it's collusion by default - just you're on the receiving end, not the giving end.

works both ways.

either way - it's collusion by default. just like coles/woolies duopoly.

 

[Tuppence]

and when vacancies are high, it's collusion by default - just you're on the receiving end, not the giving end.

works both ways.

either way - it's collusion by default. just like coles/woolies duopoly.

It's not really. The Oxford dictionary says collusion is ''a secret understanding, especially for a fraudulent purpose'' - it requires that understanding. Otherwise, it's just supply and demand (the market) at work.

 

[JBY]

Rent Increase

Wow! Luckily I ddint see this report as I just increased the rent on my Brisbane townhouse by 5.7% for the year.

 

[JamesGG]

Matusik generally deals with trending. And generally, I'm a fan of his work. His suggestions for getting a better rental return were, I think, relatively accurate. Without speaking for him, I would interpret the basis of his article to suggest that average rental figures at the end of this year, will be similar to average rental figures at the start of it.

As we all know, none of us hold the average rental property.

So, those citing examples of their own current rental increases to disprove Matusik's point, may not be the rule for the market. Bare in mind that there is still another ten months to go before Christmas, too.

And in fairness, he did state that the best time to raise rents was in and around late January.

 

[Aaron Sice]

It's not really. The Oxford dictionary says collusion is ''a secret understanding, especially for a fraudulent purpose'' - it requires that understanding. Otherwise, it's just supply and demand (the market) at work.

and you understand what your neighbour can get away with charging, so you raise your rents to suit.

or you understand what your neighbour can't get away with charging, and lower your rents to suit.

"especially for a fraudulent purpose" - last time i checked, dilution of the money supply by counterfeiting was a fraudulent act because it causes inflation, yet banks cause inflation every day.

what is fraud? fraud is deception. how can something yesterday be worth 1, and today be worth 1+x with no change in demand?

how can you raise rents, or lower rents, with no change in demand?

collusion by default. "by default" is understanding what your competiton is doing and adjusting your strategy to suit, without physically negotiating anything.

 

[quintets]

Oh no! How am I going to explain why I need to roll back a 13% rent increase!?!?

Mind you, my IP is in a low vacancy area and we bumped it after evicting the previous tenant. At the new rent, we had 30 phone calls, 10 people show up for the Sat inspection and by Tues, 6 applications to choose from.

 

[Piston Broke]

Someone please tell me who appointed Matusik, or Residex as experts in Real estate?
Imo they are both useless.

 

[kum yin lau]

Hi, Adelaide rents are indeed catching up. The Eastern suburbs are now on at least 15% higher average.

I'll put my rents up nominally at the next renewal.
Ky

 

[BV]

Mind you, my IP is in a low vacancy area and we bumped it after evicting the previous tenant. At the new rent, we had 30 phone calls, 10 people show up for the Sat inspection and by Tues, 6 applications to choose from.

It's like that everywhere in Sydney.

16 couples showed up on the open day on 1 of my townhouses when it was advertised on the internet for 2 days.

It was rented immediately.

I actually feel sorry for the applicants who have no references because in this market it'll be very hard to find a landlord who will accept their application

 

[craigb]

i am sure these reports are mostly written about someones back yard , we all know out backyards so well, and think its the best place to build our life styles from, its like trying to explain what gree is like to somone thats colour blind.

 

[skater]

It's like that everywhere in Sydney.

16 couples showed up on the open day on 1 of my townhouses when it was advertised on the internet for 2 days.

LOL! We just bought another IP. Only just settled on it and Hubby changed the vanity top (because it was broken). I was going to paint, etc, but decided that it was just too much work ATM. Anyway the carpet is filthy and it stinks. Again, we were going to re-carpet the place, but upon further inspection think it will be OK with just a steam clean this time around because it is in fairly good condition, just dirty. PM has it booked to do on Monday morning.

Anyway, they have shown a few people through it in the couple of days they have had the keys and already have applications in at a rent that I feel is quite high considering they have viewed the place and it smells. Some good applicants too.

Another IP has just been re-let to a young couple, and we are putting up a front fence. Hubby put a couple of panels in last week and went back this morning to do some more, and the new tenants have already put in plants in front of the new part of the fence. I'm happy! It looks good.