Time for some positive news!

[Propertunity]

From Residex's latest open newsletter:

Time for some positive news!
Property markets around Australia are showing the effects of successive interest rate rises and economic unpredictability, with virtually no growth in housing median values during the three months to end October.
Although the housing market's growth has stalled, our capital city populations are still increasing at the highest rates in the Western world - every year, 150,000 new Australian households are formed and each of them needs a home.

If these new householders can't afford to buy, they have to rent and this means that capital city rents are rising again. During the last twelve months, Residex figures show that median rents rose in nearly 75% of our capital suburbs, many increasing by up to 25% and some as high as 33% or more.

During the last three months, over 50% of our capital city suburbs experienced rent increases, and they occurred in all capital cities.

SO WHAT'S THE GOOD NEWS?
We are clearly moving into an extended period of rent increases and for investors, this heralds the return of positive gearing - when your rental income is greater than the cost of your loan, and the tenant is paying it off for you.

......and so the cycle continues. Rents up, % returns up, investors back in more numbers, prices up and so on.....

 

[skater]

Yeah, I'm loving the increased returns from my properties. All my city properties have had rent rises each six months like clockwork. The latest round came on line at end of November which means this month I'll be generating an additional $160pw.

Oh, sorry, it's supposed to be getting harder as we head into 2011.

 

[sash]

Yep....nothing new really.....I started putting mine up ...mostly $10-$15 dollar increases.

I also see my good buying opportunities in SA and Qld in particular. Need to wait a bit longer for Vic and NSW for the optimum buying conditions.

From Residex's latest open newsletter:


......and so the cycle continues. Rents up, % returns up, investors back in more numbers, prices up and so on.....

 

[MichaelW]

Relet my difficult access property in North Narrabeen a few months ago when the tennants left. Put the rent up by $50 to $800pw and let it in the first week of advertising it. That's a 4.9% yield on current valuation which is pretty strong. And its a 6.4% yield on my purchase cost.

My interest is locked at 6.95% for three years so she puts money in my pocket after depreciation.

Will only get better from here...

Cheers,
Michael

 

[Ausprop]

"this heralds the return of positive gearing - when your rental income is greater than the cost of your loan, and the tenant is paying it off for you."

most investors are a LONG way from here and as IRs rise it slips further away

 

[MichaelW]

"this heralds the return of positive gearing - when your rental income is greater than the cost of your loan, and the tenant is paying it off for you."

most investors are a LONG way from here and as IRs rise it slips further away

Mate, I'm there today and IRs don't impact me because I'm fixed. I think "most" investors are in the same boat because investors know its all about cash flow...

Its the newbie FHBers that will be stung by rate rises, not the investors.

Cheers,
Michael

 

[VYBerlinaV8]

If there's one thing I love, it's positive gearing. I have a strong focus on getting my IPs cashflow positive.

If we get to a point where inner city properties are cashflow positive before tax again, I'll be out shopping. A lot.

 

[Ausprop]

well I love positive gearing too and if most investors are getting 12%+ then happy days - load me up! most of the dross I look at is under 5%

 

[HomeBuyAU]

Time to put rents up everyone.....

 

[jaycee]

Mate, I'm there today and IRs don't impact me because I'm fixed. I think "most" investors are in the same boat because investors know its all about cash flow...

Its the newbie FHBers that will be stung by rate rises, not the investors.

Cheers,
Michael

That would be cause us investors dont ahve variable oans.. .none of us.. .only nefir4xst timehome buyers are stupid enough to do this.... and me.... .as suggested by my mortgage broker.....




I mena I know that investors re the best and better than everyone else etc, but bloody hell, I never realised you were THAT GOOD !!!

 

[jaycee]

well I love positive gearing too and if most investors are getting 12%+ then happy days - load me up! most of the dross I look at is under 5%

You must be looking at the same real market I am looking at

 

[hobo-jo]

Mate, I'm there today and IRs don't impact me because I'm fixed. I think "most" investors are in the same boat because investors know its all about cash flow...

Its the newbie FHBers that will be stung by rate rises, not the investors

LOL think again Michael. Do a search "fixed variable" and then read through the threads on this site. If anything there is a larger leaning towards variable and there are plenty of investors being stung by interest rate rises (or fixing at the wrong time).

http://www.somersoft.com/forums/showthread.php?t=65126
http://www.somersoft.com/forums/showthread.php?t=61368

Stats show 1 in 7 taxpayers currently own an investment property, plenty of newbie housing investors....

 

[evand]

I think the overwhelming majority of property investors are neg geared. It has been very difficult to find good property with a decent yield for a long time.

I remember clearly the number of forum members getting burnt badly with the last round of rising rates a few years ago. There was a lot of pain on here.

I cant see how you are pos. geared on those numbers Micheal.

oh..a nd Prop. Anyone thats been around property investing fro more than a couple years will take that Residex report for the self interested, biased fluff it is.

 

[jingo]

My IP's are in Melbourne. I'm not experiencing rental growth just at the moment. I actually think the demand for rental properties in certain areas in Melbourne is weak at the moment. Putting the rent up by $10 - $20 per week would cause my tenants to vacate!!

Regards Jason.

 

[on the move]

That would be cause us investors dont ahve variable oans.. .none of us.. .only nefir4xst timehome buyers are stupid enough to do this.... and me.... .as suggested by my mortgage broker.....

I beg the difference, most investors don't fix and those who fix are probably worse off than if they stay variable (like myself, mistake), very hard to beat all the experts in the banks who set the fixed rates with all their research and all that.

 

[.toe]

The evidence is not just Residex I think. According to SQM graphs in every capital city vacancy rates are tightening over the last year.

 

[devo76]

http://www.southcoastregister.com.au/news/local/news/general/nowhere-to-live/2012880.aspx

http://www.southcoastregister.com.a...ants-offer-a-years-rent-up-front/2012882.aspx

I know this is just my little corner of the woods but it also shows how rental vacancies are tight and rent is going up.

By how much and for how long i dont know. But it is pushing one way over the next year or so.

Cheers

 

[virgo]

Rents up

Hiya

Have also put my rents up in Sydney (gotta love this city!)

Greystanes (paramatta surrounds) up by $50 (house plus granny flat)
Ambarvale (campbelltown surrounds) up by $30 (3 bedder)
Melbourne (Melton West) up by $10

Not sure how to calculate whether i'm worse or better off (after those bloody (pardon moi French) interest rate increases!

But tenants do not seem too unhappy!

Have a nice day!

 

[PeterC]

But tenants do not seem too unhappy!

I'm sure they are unhappy, they'd have to be pretty unusual not to be? Whether they have any choice but to live with it is another matter! You wont find out whether they are really unhappy they are till theyve found a cheaper place and have given their weeks notice.

 

[MarkandTina]

I've put rent up by 15pw and dont plan to lower it when rates go back down

Took me less than a week to get a new tenant here in the eastern suburbs of Adelaide.