Absolutely not, I'm highlighting risks. You don't have to be a genius to know that nobody can predict the future. Everything in the future is a variable.
There is an ignore function or you can use your inate function for same.
Where are the renters?
- Thread starter bweed
- Start date
i don't see how you have any relevance to property economics, but there you go.
Your situation is NOT unique. It is, in fact, normal. Most people don't rent room to strangers.
Sorry, can't talk now. It's 'parole day' at the local prison, so I'm about to shoot down there and see who needs a room. I really need to put my two spare bedrooms to work!
interesting thought - in my very wide circle of friends, aquaintances and people i vaguely know - i don't know anyone in their home renting out rooms to others.
i do know some that are renting rooms in shared houses, but they are designated shared houses rather than someone's private dwelling.
i would say it's very unusual for people to rent our their spare rooms to strangers.
hey - i have 5 bedrooms, and only 3 of use sleeping in two of them. the others are spare room, play room and one being kept empty as uni daughter moving back mid-2011.
Same here. I know no-one doing it, and no-one WANTING to do it.
I agree with HomeBuyerStrike.
Did I just say that out loud? LOL
Those spare rooms will start to fill up, and its happening already. Its exactly what you'd expect when there is a supply shortage and high rental and purchasing costs. Like others have said, when demand is increasing through population growth and supply isn't keeping pace, price has to rise. Its the most simple of economics demand/supply curves. There is no option.
BUT, if prices are at the limit of affordability in some areas then the only options are to:
1. Earn more money.
2. Pool with others to buy.
3. Pool with others to rent.
There's a lot of people already working on option 1. You see it whenever affordability gets tight. People taking on that extra job to keep that roof over their head. And option 2 can be as simple as sending the missus back to work so you've got dual incomes like we just did. We needed the improved servicability for our development so my wife just went back to work now my boy is 5. The extra $80K a year will really help.
And, option 3 is actually really common too. My IP in Narrabeen was let to 4 young guys who all lived together and split the $750pw rent between them. They moved out a month ago and it was re-let at the first open for $800pw to three young professional girls. You're on another planet if you think shared rentals won't be on the increase. All those GenYs who want to move out of home but can't afford $800pw themselves will pool with mates.
I don't understand the issue. This will just force rental yields up to where they need to be based on current prices. When they go far enough, prices will kick off upwards again.
That property of mine in Narrabeen is yielding 4.5% which isn't too shabby for something worth a touch under a million.
Happy days as an investor.
Cheers,
Michael
Did I just say that out loud?
LOLThose spare rooms will start to fill up, and its happening already. Its exactly what you'd expect when there is a supply shortage and high rental and purchasing costs. Like others have said, when demand is increasing through population growth and supply isn't keeping pace, price has to rise. Its the most simple of economics demand/supply curves. There is no option.
BUT, if prices are at the limit of affordability in some areas then the only options are to:
1. Earn more money.
2. Pool with others to buy.
3. Pool with others to rent.
There's a lot of people already working on option 1. You see it whenever affordability gets tight. People taking on that extra job to keep that roof over their head. And option 2 can be as simple as sending the missus back to work so you've got dual incomes like we just did. We needed the improved servicability for our development so my wife just went back to work now my boy is 5. The extra $80K a year will really help.
And, option 3 is actually really common too. My IP in Narrabeen was let to 4 young guys who all lived together and split the $750pw rent between them. They moved out a month ago and it was re-let at the first open for $800pw to three young professional girls. You're on another planet if you think shared rentals won't be on the increase. All those GenYs who want to move out of home but can't afford $800pw themselves will pool with mates.
I don't understand the issue. This will just force rental yields up to where they need to be based on current prices. When they go far enough, prices will kick off upwards again.
That property of mine in Narrabeen is yielding 4.5% which isn't too shabby for something worth a touch under a million.
Happy days as an investor.
Cheers,
Michael
I know quite a few.
I would consider it also if I owned a PPOR.
No PPOR for me right now though. Rent vs buy doesn't stack up in the area I live.
Agree, I might have missed the point...
But those young people don't stay young forever. I lost my four young guys as tennants because they all moved into places with their girlfriends.
Still, other GenYs might stay home longer until they can afford to buy/rent how they want to.
There's little choice, and that's the point. The market isn't going to come back to meet them. They've got to figure out how to stretch to meet the market.
Cheers,
Michael
Because I'm an actor in the economy, simples. Your posts aren't making sense anymore. A glass of water and a lie down might be the best strategy for you in the short term.
It IS unique because I am renting far in excess of what I need and I'm content to pay for it.
You've just illustrated my point then. I'm not sure if that was your intention. You're not part of the demographic I would expect to offer empty space to strangers or friends, rather family.
The demographic that might consider 'rent-a-room' are first time buyers who would like extra income to help with their mortgage and don't mind house sharing as long as they're not paying 'dead money' to some 'greedy' landlord. Their tenants if they find them will be people with no choice. These are of course hypothetical.
I believe it's a double edged sword though. I think most investors these days have their eye on capital gain. Yield would be great but that's not the area of focus right now. Yields might improve in the situation you describe but it's likely in my opinion to be at the expense of capital gain. If the supply side dynamics change then it will effect the demand side dynamics in other words.
The effect of the FHOB would have been to bring forward a lot of demand, this is a common effect of 'discounting' on all markets.
Many of the buyers under the FHOB will have been those who ordinarily would not have been in the market until some point in the future. Those who didn't buy then are living somewhere and it's possible that a sizeable subset of them are older than another sizeable subset who did buy under the FHOB.
What that means for the market I do not know but it's a point that has to be recognised about 'discounting'. For those who didn't uptake of the FHOB, what will it take to get them to buy? I realise that some of them bought after the FHOB, taking advantage of the inevitable slump.
And so are a lot of other people, making your situation not unique. Do you know what unique means?
I understand. Unique might be hyperbole, but I don't think it's overly common. Not when the prevailing attitude is that 'rent is dead money'. If this is not the case then it would flip the market on it's head to one based on yield rather than capital appreciation.
of course - and like i said, share houses are the exception.
but the stats don't like - 50% of single person dwellings in Sydney are 3 or 4 bed homes. how many are owned?
LOL - just thought - how many lied to avoid letting on they're subletting?
there's another stat variable. oh dear, appears any and all stats are wrong and hiding info.
