Tenants Union wants governments to end negative gearing

This is only from a personal view,we have lowered rental returns
on some of our properties in the past months,several reasons for this, long term tenants are happy with the way the properties are fitted out ,several told me they will leave if the rent went up.
Walk any street in inner city brisbane and see how many properties are for rent lease ect, some i have walked past have been like that for several months if you have to lower rental returns then so be it,Investment can be defined as a act of immediate sacifice in the expectation of future rewards thats what i tell myself everyday, plus i think so many cant afford the rents in the first place..
good luck
willair...
 
A few comments:

1. Who are the tenants union? Do they represent professional tenants?

2. After reading this I did some research on domain.com.au to see if it was the case in Sydney (I am mid-way through my lease). It certainly appears not to be the case that rents are rising - at least not in Sydney.

3. Obviously the Tenants Union people have not read Jan's books and therefore don't know what happened to public housing waiting lists during the period that negative gearing was abolished in the 1980's.

That aside, a year 11 student with basic economics could tell you that if you take away negative gearing:

- you will reduce the demand for investment properties, thus

- reducing the supply of such properties, and therefore

- forcing rents up (if demand for rentals remains the same).

Way to go Tenants Union!

MB
 
Don't get it.

Do they mean they want to see rents going through the roof after neg gearing is abolished?



Originally posted by abcdiamond
"There is a downside to our booming property prices ... rents are going through the roof. "

"The Tenants Union wants governments to end tax breaks like negative gearing or look at rent control or kiss goodbye to The Great Aussie Dream"

these are comments from Channel 9's EXTRA program

http://www.extraonline.com.au/story/details.asp?StoryID=9045

How many IP owners feel that the rents are really "going through the roof" ?
Click to expand...
 
Well lets take the average $450K house in Sydney, without -ve gearing I guess the average investor would want an 8% return and thus expect about $692 per/week.

I agree with the tenants union, get rid of -ve gearing....I am looking forward to retiring on passive income!. :)

Of course if it happend the tenants union would go into panic mode due to rising rents due to lack of supply. They would then demand tax payers money to subsidize rents....so lets just put up income tax to 70%. Oh gosh...now the tenants with jobs cannot aford to pay the rent as they are taxed too much...lets just all quit our jobs...but who is left to pay the bill? Can OZ tax New-Zealanders living in NZ?
 
As stated before, it is supply and demand that determines rent levels.

I am located in Melbourne and have had to decrese rents in order to attract tenants. I believe that investors are currently being hit both ways, stagnant or decreasing rents and ever increasing housing prices which both lead to one conclusion....decreasing yields. Does this "Tenant Union" really believe that landlords are liberally increasing rents to cover additional interest and outgoings...no, us landlords are absorbing these costs. In fact, a property would be vacant for a lengthy period if a landlord resorted to these tactics i.e. charging above market rentals.

From a personal point of view, it seems that the tenant pool has reduced over the last few years (FHOG, people staying with parents longer etc) and this view seems consistent with property managers I have spoken to.

I also currently rent (see things from the other side of the fence as well) and am finding it easier than ever to negotiate lower rents with Landlords.

From the way the story has been reported, it seemd that the "Tenancy Union" are advocating home ownership rather than helping tenants.


GlennM.
 
Originally posted by always_learning
Well lets take the average $450K house in Sydney, without -ve gearing I guess the average investor would want an 8% return and thus expect about $692 per/week.
Click to expand...

8% return? Will it be enough? Say 6.5% interest, plus bank charges, plus property management fees, plus maintenance, plus capital depreciation, plus depreciation of plant, plus water, plus council rates, plus insurance - I doubt that 8% will get you over the line where tax deductions will be allowed.

To be safe, you should be looking at $900 pw, i.e. 10% on average price.

Good luck trying to save for the deposit to buy your "Great Australian Dream" my dear tenants. Do not forget to thank Tenants Union for that.

I personally seriously considering supporting abolition of negative gearing. My present LVR at 35%, this abolition will not last for more than a year or two, and as it was the last time they will roll it back and backdate rollback. In other words, no real shocks, and no chance of loosing any money.

But after that we will have all those high rise developers crash and burn (oooohhh, they deserve it!!!!) together with HK graduates, we will have tenants queing up for rental properties and therefore good choice of tenants, we will have rental returns increased, we will have the whole economy taking a dive (and interest rates with it).


Mmmmmmmmmmm...........
 
The TU are spitting poppycock.

Firstly, even though in my area rents have gone up by about $10 in the last 12 months, they are not exactly going through the roof.

Secondly, I have noticed that some rental properties are waiting for a tenant for quite a few weeks. Due to unreasonable rent expectations by inexperienced investors maybe? There is a mansion for rent on the esplanade here, and it has been vacant for 6 weeks already. Why? Inexperienced investor trying to recoup on the $2M they just spent on it? Sure, in this case the rent has probably gone through the roof.

Thirdly, the Tenants Union must be misunderstanding something. I certainly don't understand their motivation. They are shooting themselves and the tenants they are supposed to represent in the foot.

Desto.
 
Always Learning :
Love your post !
Taxing Kiwis in Oz not bad.

Why don'r we get a Landlord Union ?
We could lobby for increased rent too ! (via dumping neg gearing or whatever)
Perhaps we could support the Tenants Union on this claim.
 
Hi,

Let the tenants union read a tax manual. Its the negative gearing that makes investing viable which keeps housing affordable.

-Regards

Dave
 
Oooh, pick me!!!
Show me where the rents are going through the roof and I'll buy there....
It certainly hasn't been my experience, rents have stagnated or even gone backwards from my personal experience and observation around Melbourne.
 
Wow, how misconceived !!!

From what I've seen, rents are dropping, as more and more investors are entering the market (therefore more rental stock available), trying to attract a reducing pool of tenants (FHOG etc).

Do these people understand anything or just open their mouth and let whatever come out? It certainly doesn't add up.

Remove neg gearing, and you'll have lots of investors who have to sell down to get to a sustainable level (housing prices dive, hurting everyone in the process), and rents going higher as the pool dries up.

Sorry, whose side were they on again??

Simon.
 
The Tenants Union in Qld gets govt grants, unlike the Property Owners Assoc.

There is evidence that it is successful in lobbying Govt. and the RTA. This can be seen from the direction of rental regulation and decisions.

Recent example is the review of the tenant registers (yes some change was needed, but the interests of the defaulting minority were well protected and probably to the disadvantage of the majority of good tenants).

The direction of policy has been to increase the obligations and administration costs of owners, even to the extent where we are responsible for ensuring that tenants have RTA brochures -which are publically available!

Most rental property is owned by ordinary people who have average means and own 1-3 properties. Property owners are not seen as a political force because they are politically naive and do not act together. For example, they do not support the REI or Property Owners Assoc in great numbers. Another example is that few owners contact local members about policy affecting them.

Like higher interest rates, more regulation is more than a possibility.

Fact is, if you are involved in the property industry you should be seeking to influence policy to protect your interests. One way is through existing organisations like the POA.

I would like some lobbying to market test the administration of public housing. Because the rentals set for public housing are too low, the maintenance costs are too high and the obligations of the tenants are too few. A case of too few getting too much.
 
Rental Yield and Viability of the Rental Industry

The Tenants Union and policy makers need to realise that for the private rental industry to be viable, there must be adequate yield.

Rental yield has diminished over the years and there have been additional costs that have been absorbed.
 
Some interesting points raised by Jean.
It sounds as though it might be useful to be in a position to be able to "politically" counter the arguments that they put forward.

The original comments included

or look at rent control
Click to expand...

This happened in the UK many years ago, I cant recall exactly what happened then, but I do remember that it created problems.

If that happened here, I assume it would cause a big sell off of IP's, massive shortage of properties for rent, and a change of Government !!!

The problem is that I have seen many things happen in this country, (govn't policies), that should never have been done, if they had checked on the mistakes made by other countries in the past. They should have learned from others mistakes, rather than doing exactly the same.
 
Originally posted by Jean
The Tenants Union in Qld gets govt grants, unlike the Property Owners Assoc.
Click to expand...

Jean,

Are you a member of POA? If yes, what do you see as the benefits for IP owners, especially those of us who have PMs. I was given the understanding that POA mainly focusses on owners who manage their own properties.
 
Hi all,

Might sound like a dumb question, but what exactly did they mean by rent control?

And no, i havent read the linked article yet :p

-Regards

Dave
 
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