Rents Falling!
- Thread starter JIT
- Start date
Ta dah 
.....my point exactly....It's not rocket science, but a logical equation of SUPPLY & DEMAND!!!
Forget your "niche" markets or your conversative strangle hold on Gen-Y purse/wallet strings, if you need a place to live, you need a place to live...and if there ain't enough rental properties on offer, you take whatever is going, at whatever price!!
Hence, if rental prices are on the way down (anywhere) it has to be because people looking to rent are not starved for choices.
Too easy....
.....my point exactly....It's not rocket science, but a logical equation of SUPPLY & DEMAND!!!Forget your "niche" markets or your conversative strangle hold on Gen-Y purse/wallet strings, if you need a place to live, you need a place to live...and if there ain't enough rental properties on offer, you take whatever is going, at whatever price!!
Hence, if rental prices are on the way down (anywhere) it has to be because people looking to rent are not starved for choices.
Too easy....
Bingo again, thanks GA.
That would explain a lot. Of course if there is an oversupply of Holiday rentals, landlord/ladies have to attract the punters, and the most logical way of doing that....drop the price.
Apologies, I was confusing the original question with everyday (not holiday) letting.
Cheers,
Jo
I tend to think that people will obviously pay rent that is within their means. It is not a matter of paying whatever price to get a property to call home, renters will shop to find what they can afford and what they consider resonable at that given time. With the economy tightening then it is only reasonable to suspect renters are doing the same.
650 to 750/wk, OMG why wouldnt you buy!
650 to 750/wk, OMG why wouldnt you buy!
In the Hills District (sydney) - rents appear to have eased off, and in some cases have gone down.
We looked at moving to a new rental property back in April/May 2008, but the market was so tight and rents so high for crappy properties, so we stayed where we are now.
Looking again now, as our lease expires in May, and there is a LOT more available. Lots more choice, better properties, and the rents are more reasonable. Some properties have even dropped their advertised rent a little since mid Dec, and havent been leased yet.
However, in the Hills, sales volumes have been strong, and there is definitely some growth in prices.
We looked at moving to a new rental property back in April/May 2008, but the market was so tight and rents so high for crappy properties, so we stayed where we are now.
Looking again now, as our lease expires in May, and there is a LOT more available. Lots more choice, better properties, and the rents are more reasonable. Some properties have even dropped their advertised rent a little since mid Dec, and havent been leased yet.
However, in the Hills, sales volumes have been strong, and there is definitely some growth in prices.
Rents from what I can see online for larger homes (rents in excess of $600) in Prahran/Windsor (Melbourne) have definitely eased from the last quarter of 2008. From what I can make out around $30+ per week.
Just doing new leases for sitting tenants in Coorparoo. One is increasing from $350 to $410 per week because $350 was low (for personal reasons), but we can no longer be "nice guys" and have to put our "business" hats on. We had an appraisal for $400 to $410 per week for this house and we did soften the blow by installing a split system and not charging any extra so I believe it is a win/win for tenant and ourselves. Tenant is fantastic and we didn't want to lose her, but had to get the rent up closer to market rate and by doing so, we risked losing her. I believe if she looked around, she would see that she couldn't rent elsewhere for less than she is now paying, and she is staying.
Other place we had an appraisal at $460 per week and we asked $495 including mowing. This house has three young singles, so rent went up only $12 per person, and they are happy to stay. I would have preferred a family in this house, but in this financial mess, perhaps three singles are better placed than one family to pay the rent.
Other place we had an appraisal at $460 per week and we asked $495 including mowing. This house has three young singles, so rent went up only $12 per person, and they are happy to stay. I would have preferred a family in this house, but in this financial mess, perhaps three singles are better placed than one family to pay the rent.
Not sure if the legality of it, however I know that Fair Trading can pull you up on it if it is excessively higher than the going rate, and you will be forced to reduce it to be in line with the rest of the market.
I understand what you're saying Wylie, and I've known a few people in the same boat; basically they'd let "long term good tenants" go without increasing the rent for so long, that the yield was ridiculously below market.
Problem was, when they tried to increase it, although it was "within the going market rates" that kind of jump was considered excessive and (under fair trading) not permissable. Increases have to be made in acceptable increments, not huge leaps.
Either way, if you've increased it, and the tenant is happy to wear the huge rise, then I don't see a problem. If on the other hand they go to FT about it, you may be asked to drop it back, and increase it again (marginally) later in gradual stages.
Cheers,
Jo
Problem was, when they tried to increase it, although it was "within the going market rates" that kind of jump was considered excessive and (under fair trading) not permissable. Increases have to be made in acceptable increments, not huge leaps.
Either way, if you've increased it, and the tenant is happy to wear the huge rise, then I don't see a problem. If on the other hand they go to FT about it, you may be asked to drop it back, and increase it again (marginally) later in gradual stages.
Cheers,
Jo
I take your point, however, there is nothing in the RTA site setting out a dollar amount or percentage amount of increase. Having read the fact sheet about increases, we would have no problems justifying the increase as it is still actually under market. Appraisal came in at $400 to $410. We added air-con and are mowing the yard so if this particular tenant left, we would be charging a new tenant $435 to $440.
We would normally never increase the rent that much for a continuing tenant, but in this case, the tenant knows she has had very cheap rent for at least the past two years and knows that she is still under market rates, and we are very happy to keep her there. One week's vacancy would dilute things and two week's vacancy even worse, so we are happy to keep her. She is a dream tenant.
I agree though, that long term tenants tend to get a good deal, as we tend to creep it up under the market rate in order to keep them.
This particular house we have just signed another twelve months and next January we will probably ask $20 extra (of course, depending on what happens in that twelve months, we may not, or we may ask more).
We would normally never increase the rent that much for a continuing tenant, but in this case, the tenant knows she has had very cheap rent for at least the past two years and knows that she is still under market rates, and we are very happy to keep her there. One week's vacancy would dilute things and two week's vacancy even worse, so we are happy to keep her. She is a dream tenant.
I agree though, that long term tenants tend to get a good deal, as we tend to creep it up under the market rate in order to keep them.
This particular house we have just signed another twelve months and next January we will probably ask $20 extra (of course, depending on what happens in that twelve months, we may not, or we may ask more).
This is indicative of the overall theory that you are better off to be buying IP's in the lower 3rd of price range generally (as per Jan Somers and Marg Lomas). I happen to agree with this.
There are way more renters at the lower end, and way more buyers at the lower end.
Thus, for landlords; especially those starting out, this means you can minimise vacancies, and maximise rental return due to increased demand, and when it comes time to sell; stronger prices with less fluctuations.
Outer northern Adelaide suburbs increasing quite rapidly, we've found ourselves about 10% behind in DP only a few months after getting a new tenant in, EN has just been increased for 2nd time in 7 months.
Even inner northern burbs seem to finally be stirring, supply appears to be much lower than a few months ago.
Even inner northern burbs seem to finally be stirring, supply appears to be much lower than a few months ago.
How would you like it if your regular mechanic one day decided to charge you not the usual $150 for a service, but $210 for no good reason.
If he had been charging me $150 for my services for the past couple of years when the mechanic next door was charging his services out at $210....... I would be fine with it. I would think how lucky I had been for the past two years to be getting my services at such a big discount!!
As I am the person who has increased the rent by $60 I thought I would answer this. This tenant has been paying under market for some time, with our blessing, due to us knowing her personally and because our interest was locked in at a low rate. However, we cannot be a charity forever and the only reason it went up $60 in one hit was because it had been so low.
For a new tenant we would be asking another $25, but then, a new tenant would have no idea of what the previous tenant had been paying.
Perhaps you didn't understand my post. We have increased her rent, but it is still considerably under current market rent for the place. She knows all this, and understands that we no longer can subsidise the rent. She knows she has been getting a good deal for the past couple of years. She knows if she moved, she would be paying more again than the new rent.
