Rents Falling!
- Thread starter JIT
- Start date
You should... if the tenants move out, you will be forced to foot the rental bill unless off course they are breaking lease etc.
LOL same, il shed light on this too...
i purchased house november (settlement) i instructed vacant possession coz tenant was paying $160pw, so tenant kicked out, got new one @ $240pw (market rent) tenant was on 3 month lease because they had no history and had low income. after 6 weeks i said they could stay, but asked for $20 extra. to which i have not heard any backlash.
few points;
- banks dont go poor guy lets negotiate nor do strata, council, water, insurance or agents
- tenant was telling me how greatful they were to get accepted coz they been looking for 8 months and no1 would give em a go (house is a dive)
- i realised they have LCD tv on the wall when i went there and thought, thats nice, im subsiding (not this IP but other tenants) living costs from my pocket so they can live here, and they get luxurys i dont get the pleasure of having.
I have to say that I agree with Boomtown & Nathan on this one. My properties are my Business and I expect to get the most $$ I can for them. In my neck of the woods it is not uncommon to find a "poor" tenant struggling to pay the rent because they spend all their income on foxtel, plasma, Wiis, Playstations, brand name clothing, mobile phone, crap (& I mean crap) for the kids, beer, cigs, etc. In general they are having a lovely lifestyle & then cry poor to the "rich" landlord (or the PM).
I don't do discounts. I don't improve properties (unless it gets more rent), but I do maintain in good order. I don't listen to sob stories. It's business, pure & simple.
I don't do discounts. I don't improve properties (unless it gets more rent), but I do maintain in good order. I don't listen to sob stories. It's business, pure & simple.
Hi all,
Sparky I would check the tenancy laws in the particular state you are talking about, they all seem to differ. Here in Victoria there is some sort of 10% rule (max increase) for existing tenants.
A friend of mine who bought a block of units that were undercharging rent, had to increase rent by a max 10% per year until rents reached market levels over a couple of years. Of course when a tenant leaves you can do what you like.
bye
Sparky I would check the tenancy laws in the particular state you are talking about, they all seem to differ. Here in Victoria there is some sort of 10% rule (max increase) for existing tenants.
A friend of mine who bought a block of units that were undercharging rent, had to increase rent by a max 10% per year until rents reached market levels over a couple of years. Of course when a tenant leaves you can do what you like.
bye
I totally agree.
Sure we have a legal/moral obligation to supply a product/service up to an approved regulated level to our clients/tenants just the same as any other type business and in return our clients/tenants need to abide their legal / moral obligations.
We as landlords are running a business, not a charity.
Business approach
Hi all
I agree with the comments made about investment properties being treated like business's, but dont forget that with this investment your success is not in your hands 100%. You lock a tenant in for 12mths, you hope that at the end of the 12mths your have got a good return, ie: rent paid, home looked after. So the more you find a balance, the better the outcome. Look after the good tenants and increase as required , get rid of the bad tenants quickly to adjust and reset, but never allow the heart to rule the mind when business decisiions need to be made.
On the point about rent increases, it shoud be noted that in QLD the tenant can lodge a claim in Small Claims Tribunal for excessive rent increases. It is then the obligation of the landlord/agent to justify the rent increase and validate how they arrived at that price. In Small claims court, remember this is a court of equality, not evidence so often the $60 increase might be warranted due to market conditions, but it could be veiwed as to excessive in one hit for any person to afford. I can tell from experience, that more tenants will start to challenge your rent increases if they think it is to rich.
On the other hand, you might choose to live by the sword and die by the sword!!
Hi all
I agree with the comments made about investment properties being treated like business's, but dont forget that with this investment your success is not in your hands 100%. You lock a tenant in for 12mths, you hope that at the end of the 12mths your have got a good return, ie: rent paid, home looked after. So the more you find a balance, the better the outcome. Look after the good tenants and increase as required , get rid of the bad tenants quickly to adjust and reset, but never allow the heart to rule the mind when business decisiions need to be made.
On the point about rent increases, it shoud be noted that in QLD the tenant can lodge a claim in Small Claims Tribunal for excessive rent increases. It is then the obligation of the landlord/agent to justify the rent increase and validate how they arrived at that price. In Small claims court, remember this is a court of equality, not evidence so often the $60 increase might be warranted due to market conditions, but it could be veiwed as to excessive in one hit for any person to afford. I can tell from experience, that more tenants will start to challenge your rent increases if they think it is to rich.
On the other hand, you might choose to live by the sword and die by the sword!!
Can you show me any investment that is?
We do have more control over this investment than almost any other type out there.
Simon, also note that the increase was apparently not excessive, as it is still under market rate.
If it was over market, the tenant would probably not have renewed the lease and the prop. would be vacant now, forcing the LL to re think their over market increase.
Dave
Hi Bill
Yes I would, I was just asking the question after reading that it had been done. No such plans for myself, just now staying with 6 month leases and putting in increases as and when it is appropriate as recommended by the managing agent.
Dave[/QUOTE]If it was over market, the tenant would probably not have renewed the lease and the prop. would be vacant now, forcing the LL to re think their over market increase.
I hear what you are saying, no dispute from me but hearings in small claims court are often made on emotions, not facts such as market price etc. You can tell a magistrate till you are blue in the face that all you have done is move it up to market price, and they might not support you. Whats happening is tenants are challenging below and over market prices and you should be aware of it.
I hear what you are saying, no dispute from me but hearings in small claims court are often made on emotions, not facts such as market price etc. You can tell a magistrate till you are blue in the face that all you have done is move it up to market price, and they might not support you. Whats happening is tenants are challenging below and over market prices and you should be aware of it.
I hear what you are saying, no dispute from me but hearings in small claims court are often made on emotions, not facts such as market price etc. You can tell a magistrate till you are blue in the face that all you have done is move it up to market price, and they might not support you. Whats happening is tenants are challenging below and over market prices and you should be aware of it.
All fine and dandy but surely they would have to produce evidence of similar property in the same area for less money?
You cant just say"The rents to dear because I say so, boo hoo" and then as supporting evidence show a rundown dogbox in another suburb and say "see, cheaper house".
Dave
if the tenant takes me to tribunal over the increase, i send letter out giving vacant possession in 60 days, and i put the rent up again with new tenant... problem solved
its like the whingy employee, who says why did i get a 3% increase in wage this year when the other staff member got 5% extra, and takes you to the unions, you performance manage them and they are now unemployed, looking for a job paying 10k less then they got before.
its like the whingy employee, who says why did i get a 3% increase in wage this year when the other staff member got 5% extra, and takes you to the unions, you performance manage them and they are now unemployed, looking for a job paying 10k less then they got before.
if the tenant takes me to tribunal over the increase, i send letter out giving vacant possession in 60 days, and i put the rent up again with new tenant... problem solved
A few people have mentioned they have vanquished their troublesome tenants in such a manner. Doesn't the 60 days notice preclude you from renting it out again for a specified period?
Our flat has just been re-let. Exisiting tenant moves out on the 6th Feb, new one moves straight in on the 8th Feb. Was surprised to get the asking rent because it was higher than similar properties in the area.
However we have a terrace house available for rent in the same area. It is taking longer to rent. There seem to be more terrace homes available for rent in Melbourne at the moment than this time last year.
Without having done proper research to substantiate my assumptions, it seems that properties sub $400 (eg our flat) are renting quickly but anything over $400 is taking longer to rent. (eg terrace homes).
Just another thought too, with interest rates about to drop another 1% and then again it will make the difference between buying and renting marginal. Will this have some bearing on the vacancy rate?? Perhaps Black Dragon could report on this aspect as well??
Regards Jason.
Even if interest rates drop to 1% there will always be those who rent for a number of different reasons.
Here are some:
1) the idea of owing a lot of money (owing 300K against renting for 300 per week puts alot of people off.
2) job security
3) not wanting to be in one place for too long
4) financial insecurity
5) grass is greener elsewhere
6) must have everything else first, nice car, TV etc.
Here are some:
1) the idea of owing a lot of money (owing 300K against renting for 300 per week puts alot of people off.
2) job security
3) not wanting to be in one place for too long
4) financial insecurity
5) grass is greener elsewhere
6) must have everything else first, nice car, TV etc.
Given the sentiment in the market today and for the foreseeable future, even with IR coming down, people will generally be averse to taking on a large debt.
Confidence will need to pick up and of course IR falls help. I still think there will be a relatively long lag between low rates and confidence uptick.
In SA you don't have to give reason for not renewing a lease at the end of a term (ie. no need to claim maintenance/reno issues etc). If they're on periodic, the same 60 day notice without reason Nathan mentioned applies. We've gotten rid of a couple nuisance tenants like this.
