Rents Rising
- Thread starter rich ando
- Start date
Rents are rising
Rents usually have to rise whenever the tenancy lease expires (unless the owner is feeling generous or wants to retain a good tenant).
This is to cover rising holding costs from interest rate rise, local government rates rise, insurance premium rate rise, etc.
Adds to inflationary pressures in the economy (an issue which is becoming more topical by the day).
Costs of living are rising with petrol price, prices of meat, fruit and vegetables.
Say you renew a tenancy term expiring next week for a year without raising the rent and interest rate rise again in August (as an example), you will be falling behind in investment returns.
Best to raise the rent whenever you can!
In Perth and maybe the whole of WA, it is now very easy to raise rents whenever renewal comes.
Rents usually have to rise whenever the tenancy lease expires (unless the owner is feeling generous or wants to retain a good tenant).
This is to cover rising holding costs from interest rate rise, local government rates rise, insurance premium rate rise, etc.
Adds to inflationary pressures in the economy (an issue which is becoming more topical by the day).
Costs of living are rising with petrol price, prices of meat, fruit and vegetables.
Say you renew a tenancy term expiring next week for a year without raising the rent and interest rate rise again in August (as an example), you will be falling behind in investment returns.
Best to raise the rent whenever you can!
In Perth and maybe the whole of WA, it is now very easy to raise rents whenever renewal comes.
rich ando said:
Don't worry, it'll come......the halt to rising rents that is......... because you are still in a rising real estate market and everybody is going crazy buying, reno-ing up and lot's of folks are moving west too, but........will they keep heading west forever..........no. Sorry to burst your bubble but we here in the east go before you and just last night I saw the first of the reports on the news saying how vacancy rates are now at their lowest levels in 6 years.....yes...lowest since the crazy days of real estate buying. Rental vacancy rates hit their highs at the top of the price market just before the bust.
This is where I reckon you guys are right now in WA. Having a fair bit of involvement in WA, I'm not saying these things without having knowledge of the market, but more importantly, what I'm seeing here first hand, knowing the same will happen there no matter how much the resources help, sooner than later the price will be too much for people to pay.
The reason our rents (read:low vacancy rates) are now on the rise here is because investors have gone elsewhere (W.A....? & ASX) and there is still the base rate of population increase happening and the fact that more people than ever are renting which is good for all property investors, which we now have less of.
However, we have these movements in sentiment in-between and it tends to get over-run and exaggerated in the heat of the moment.
I have learned the lessons from Jan Somers and from time in the market......and patience.....that is the key.....cycles....what I saw last night in the news was yet another confirmation that the cycle is still going around the same path. They had prospective tenants interviewed saying that they are having to resort to auction style offering to get a place, complaining that other tenants are offering higher rents to secure a place. I got shivers.....good shivers because when all seems to be going badly in RE market, then it starts to turn around.....so.....i feel sorry for the prospective tenants now but did they feel sorry for us the last few years.....?
Take what you can while you can and when it hits the fan, bunker down cause it'll come back into your favour......don't worry about interest rates and other economic short term probs. people still need a roof over their heads.
W.A. still has a little bit of rise yet but it's getting close to levelling off for me. Take care!
Yes, do raise your rents at each new tenancy if you can, two years ago we had to "tempt" tenants with offer of first week free etc...now we have the upper hand....they are offering.....
The other consideration to raising rents is the dollar cost averaging side of things......how about raising your rent $10/week....sounds great ahy?
How about keeping the rent where it was and renting out immediately after a vacancy and not losing a couple of weeks rent at the higher rent trying to attract a higher return (is it going to real).....do the sums........I do tend to keep raising where I can as it's harder to make a large jump in one go. Gotta pick you own comfort level. But definitely the best time to raise rents is between tenants.
Raved on enough I'm sure,
sorry....
it's a great game though...have fun!
Cheers,
thorpey.
Yep Rents still going up
My 2c
Rents are going up more now, things are looking better for landlords, vacancy rates are very low, still patchy, some suburbs have zero vacancy rates things go as soon as they are on the books even before ads, but other suburbs (outer burbs) still have stuff hanging around.
We put all the rents up, either $5 $10 or $15 each
cheers
quoll
My 2c
Rents are going up more now, things are looking better for landlords, vacancy rates are very low, still patchy, some suburbs have zero vacancy rates things go as soon as they are on the books even before ads, but other suburbs (outer burbs) still have stuff hanging around.
We put all the rents up, either $5 $10 or $15 each
cheers
quoll
I had an IP in northern Perth beachside suburb at 310.
Early in the year they bought, I'm currently getting 365 from the new tenant.
I expect to be able to put it up close to 400 at the end of the year (lease expiry - unless they remain, then I'll pop it up to around 375).
BTW it's a 4 x 2.
P.S. Obviously I had it below market previously (I'll blame lack of attention on my part and the monkeys managing it for me)
Regards to all.
Early in the year they bought, I'm currently getting 365 from the new tenant.
I expect to be able to put it up close to 400 at the end of the year (lease expiry - unless they remain, then I'll pop it up to around 375).
BTW it's a 4 x 2.
P.S. Obviously I had it below market previously (I'll blame lack of attention on my part and the monkeys managing it for me)
Regards to all.
