Why Tenants & Landlords Are The Way They Are? The Tenant vs. Landlord Debate

[granev]

Current landlord is great, previous one was crap. I'm happy now, and am looking after my place (planting trees etc)

The one difference though between shares and property is, if I bid up shares so much that the yields are crappy, if I go over to the workers of that company and demand that they work harder to get my yields up, people laugh in my face!

But if you think rents should rise faster than wages while having more houses and bedrooms per person in Australia's history ever just because credit conditions caused prices to go up, then nobody looks at you funny at all.

HG
The price of shares has gone up way more than the number of available bedrooms in the last 5 years (decade , etc)
back to the thread - you as a shareholder and me as an investor are in it for the same reason - as an investment - not to be a great guy - find the cure for cancer or lack of water - to look after our futures
there will always be good landlords and bad landlords as there will be good tennants and bad tennants - lets just hope water finds its own level and everyone gets what they deserve.
but in the meantime , dont knock me for investing , just like you are investing in shares , it is just the means , not the end , and you are doing no better for society than me ( though you come accross as so self rightous it is sickening) - in fact you are doing less , like i said , i look after my tennants , they are doing the right thing by me - no laughing in anyones face , just a good business transaction

 

[wylie]

HG. Nobody looks at you funnily because prices have been going up (not all places, not all the time) for years and years, through all types of economic situations, through all types of governments, through yada.... yada..... yada.....

If things just stop (highly doubtful) then some property investors will be in trouble, but most of the rest of the Australian population will be in (probably) way more trouble.

I have held property since my first purchase in about 1978 so have seen a few cycles. I don't understand figures, don't need to. If our rents cover our loans (or even come somewhere close) that is all I need to know. What I do know is that property we have bought has gone up, sometimes with little sideways moves and once a small downward move (about two years ago). I have blind faith that it will continue. If I am wrong, we will have to fall back on the profits we have made over the past 25 years to sustain us.

There is no rhyme nor reason as to why property prices do what they do, they seem to go up regularly, through all sorts of conditions.

Why not just buy something and relax and let time do its job.

Wylie

 

[granev]

or just do what you do HG if it works for you

BTW I really enjoy your alternative input on the forum , you are obviously a very intelligent young man and a deep thinker

but like wylie , i have been round for a while , bought my first ppor 20 years ago in heathridge - perth - which at the time was at the end of the world , for $45,000 , I would hate to think what it is worth now , but at the time , eveything was relative , and it seemed like a huge commitment at the time.

hindsight is such a wonderful thing

but you can only control now and the future

 

[Bargain Hunter]

Tenants... have had some good ones and have had some bad ones.

The good ones pay their rent, ask for things to be fixed within a reasonable time, keep the place tidy (you'd think they owned the place), and don't cause trouble for the neighbours.

The bad ones don't pay their rent, demand things be fixed immediately (even if it's Sunday and they have known about the problem for a week), make life hell for the neighbours, and when they are moved on owing more than a months rent, they leave the place like a bomb hit it. All the while complaining about how much a ******* the landlord was...

To quote my boss, "it is, what it is". To quote my brother inlaw, "if you have your own business, you deserve everything you get".

Success comes at a price... so does failure.

Regards

Andrew

 

[Dazz]

Tenants... have had some good ones and have had some bad ones.

The good ones pay their rent, ask for things to be fixed within a reasonable time, keep the place tidy (you'd think they owned the place), and don't cause trouble for the neighbours.

The bad ones don't pay their rent, demand things be fixed immediately (even if it's Sunday and they have known about the problem for a week), make life hell for the neighbours, and when they are moved on owing more than a months rent, they leave the place like a bomb hit it. All the while complaining about how much a ******* the landlord was...

Exactly right. I've found a quick and easy method for distinguishing between the two types. Usually the names of the good ones end in Pty Ltd. However, this doesn't always cover your interests. So we went one step further and now insist on at least 6 months bond or guarantee....call it what you like, but it's folding cash in your pocket of their money ready to be spent when they start carrying on like a pork chop.

Seems to keep them on the straight and narrow nicely.

I'd love to be HG's Landlord.

 

[HiredGoon]

Gah, my point was:

Say I bought BHP shares and the yields are bad. Should I go around complaining about "greedy miners" who should work harder to get my yields up?

Of course not, because income is not determined by share price.

But people here often complain that "greedy renters" are getting a free ride because rent yield is so low. But rents have risen with inflation, wages and historical trends.

The reason yields are low is because people have pushed house prices up far far beyond their rental profitability. Income should determine capital prices not the other way around!

 

[Twitch]

HG, your analogy doesn't work. Miners are a cost to BHP whereas renters provide the revenue for a PI. Your anaology should be; say you owned 100% of BHP, would you try and drive the revenue up? Say negotiate higher prices with the Chinese?

 

[Simon]

Gah, my point was:

Say I bought BHP shares and the yields are bad. Should I go around complaining about "greedy miners" who should work harder to get my yields up?

Of course not, because income is not determined by share price.

But people here often complain that "greedy renters" are getting a free ride because rent yield is so low. But rents have risen with inflation, wages and historical trends.

The reason yields are low is because people have pushed house prices up far far beyond their rental profitability. Income should determine capital prices not the other way around!

Good point.

I am both a landlord and a tenant. I self manage and my 5 tenants are happy people who want to stay on, they enjoy when I visit to do odd jobs and I am invariably asked to stay for a drink or a meal.

My landlord is a good bloke who immediately did the one small improvement I asked for - just a $100 gas point. In addition I pay my rent on time and keep the place clean (my wife is a neat freak). The garden will also be better when we leave than when we arrived but that is just cause I enjoy that stuff.

So in my experience of both is that it all works well if people treat it in a businesslike fashion and treat each other with respect. When it doesn't work is when either side has an unreasonable expectation and/or doesn't treat the other party and/or property with respect. Sometimes complex issues can be simplified.

My previous experience as a tenant was not so great - cos the landlord was a young woman who had renovated and then moved in with a bf. She rented to us with two small kids. When we left a year or so later she wanted the whole carpet replaced because of a small coffee stain by the dining area that was cleaned twice and almost invisible. Funny thing was that the PM told me she was her worst landlord stresswise and wanted to drop her - and PMs don't easily drop landlords!! She just wasn't cut out to be a landlord of her own pride and joy.

None of us can change this, we can just arrange our situation to be of most benefit to our families, just like people have been doing since before Noah built a boat for his kids and pets. If guess you might say "What would it be like if we all thought this?". Like Yossarian I might answer "Then I would be a fool to think differently?".

I am guessing you are young enough and full enough of piss and vinegar to believe you can change the world. You might do so but you wont by banging on on a few forums. You need to get to the masses mate. Maybe become involved in politics or write a book or something else.

Good luck,

 

[TheCamel]

Gah, my point was:

Say I bought BHP shares and the yields are bad. Should I go around complaining about "greedy miners" who should work harder to get my yields up?

Of course not, because income is not determined by share price.

But people here often complain that "greedy renters" are getting a free ride because rent yield is so low. But rents have risen with inflation, wages and historical trends.

The reason yields are low is because people have pushed house prices up far far beyond their rental profitability. Income should determine capital prices not the other way around!

You're generalising.
I told my PM that I wanted X amount, but if she could get more, i'd be happy with that.

We advertised it at X+7% Negotiable.
Tenant offered X, so I took it.
and it's not a case of this tenant offering more than the others.

 

[natmarie73]

Gah, my point was:

But people here often complain that "greedy renters" are getting a free ride because rent yield is so low. But rents have risen with inflation, wages and historical trends.

HG, I have never read any posts where people here have complained about greedy renters. Please post a link to any posts which say such a thing.

 

[kaf]

It's interesting how different expectations are in diffent countries. Germany is a country of renters and there it is the tenant that renovates the place, provides their own curtains, light fittings etc. and fixes small things. Most rental properties are owned by large companies using real estate as investments so of course the care factor to provide shelter is huge .

As large apartment houses are common there is often an on-site manager which comes around and looks after many issues. My experience is to keep out of theses people's way as the ones I dealt with were grumpy and not very helpful (but then I was never in high-quality accomodation). Rentals are so tight in many areas that waiting lists are huge and it's quite hard to find a place. Once you found something you tend to stay for quite a while so again it became your place with renovation, planting a garden etc.

So I have to say in comparison to that Australian tenants are pretty spoiled...

kaf

 

[Les]

G'day all,

I think HG is completely over-looking "Supply and Demand" - the thing that acts on rents, house prices, and, if I'm not mistaken, Share Prices.

S&D is the big mama of "movement in any prices" - up, or down.

Do you agree, HG? Or are you going to stick with "Inflation Index" - and only buy shares that don't exceed this 3 - 4% range?

Hey, wait - the penny has just clicked - I bet YOU have had your "greedy landlord" stick up YOUR rent, haven't you - and I bet it exceeded the CPI - that's why you are now carrying on like the proverbial.... You could always vote with your feet (or, more likely, maybe you know it won't help you one iota by doing this, as all the other rents have similarly climbed - check out S&D.... it's all working just the way it does)

Regards,

 

[Bandita]

But people here often complain that "greedy renters" are getting a free ride because rent yield is so low. But rents have risen with inflation, wages and historical trends.

I have never heard this from anyone, never thought this, and certainly wouldn't believe it it was even close to the norm belief out there. I've always considered rents to be a factor of supply and demand as well as the other factors you stated above, that's it. We actually chose tenants for our latest IP that offered to pay less rent than other applicants because we thought they would make better tenants.

And, on the other side, I'm a tenant myself, and we've always offered the rates the properties have been advertised for. If the landlord wanted more, and thought we were 'greedy renters' they should have asked for more - we've always picked up properties as soon as they've been advertised, so I know they haven't tried for higher rents and dropped the price because of no bites.

Believing that rents are the level they are at because of "greedy tenants", is ridiculous.

Cheers,
Jen

 

[alexlee]

Rents are a function of supply and demand. If market rents are low, it's because people are building too many properties and there is a high proportion of investors. If investors get low yields, too bad. They wear whatever losses they get hit with. On the other hand, when rent is high because there is an undersupply, renters shouldn't complain either.
Alex

 

[Ausprop]

I have often complained about greedy renters and stand by that. At the level of economic return achieved, tenants should be singing the praises of the poor hard working taxpayer (be they property owners or not) who are funding their personal lifestyle decisions.

I am considering joing the gravy train - next to nothing rent, no council rates, water rates, water bills, repair bills, building insurance, gardening, depreciation, headaches and whenever you feel like a new gadget just get on the phone and demand it. at worst you may have to pay $5 a week extra... cheapest payment terms ever! Of course lounge suites from Harvey Norman aren't funded by taxpayers... unless it's part of your rent deal right?!

 

[Dazz]

I have often complained about greedy renters and stand by that.

I am considering joing the gravy train - next to nothing rent, no council rates, water rates, water bills, repair bills, building insurance, gardening, depreciation, headaches and whenever you feel like a new gadget just get on the phone and demand it.

I thought about your previous comments Ausprop, when HG mentioned people who complained about what he complained about....

...and you've eloquently repeated your thoughts again. You know I agree with you, but the majority don't see it like that so refer back to this "big picture" thing.

I've learnt to just sit back and keep making money while the others ponder the philosophical and emotional side of things. I still reckon if you don't like the lay of the land and don't like the rules, simply don't play the game.

 

[Ausprop]

you are right, if you don't like it then don't do it. I will try my hardest going forward not to.... the ones that are in place are frustrating enough! I feel it is just part of the education process to fellow investors - an eye opener if you like. I realise I am up against a lot of resistance on a buy and hold investment forum where the mantra seems to be 'you bewdy another tax deduction' - the free riding whingeing tenants just get my back up.

Myth - rent is dead money. nope... it's the best value for money that you are likely to spend your hard earned on. Myth - the great australian dream. why is this so stuck in our psyche? is it part of our strong socialist ambitions? the fair go spiel that gets rolled out so often?

 

[DavidMc]

Usually the names of the good ones end in Pty Ltd.

Ha ha! I love it. I guess that makes me a good and a bad one.

 

[Timmy]

Goodbye

I am guessing you are young enough and full enough of piss and vinegar to believe you can change the world. You might do so but you wont by banging on on a few forums.

Not a truer word spoken for a long time on this forum. People discuss, complain, argue, thorise, self-indulge, but nothing ever changes.

If you don't visit the forum for a few weeks, when you come back, people are still talking about the same things. There are the 'same' newbies, asking the same newbie questions. There are the same regulars, answering the same questions. There are the same experienced members, telling us all about their experiences. There are the same arm-chair philosophers still giving us the same answers to world peace.

At the end of the day, I'm not sure what everyone gets out of it.

After 100 posts (with probably at least 10% of these deleted), nothing has changed, and nothing will change.

Things just are the way they are. And as Dazzling so finely put it....

I've learnt to just sit back and keep making money while the others ponder the philosophical and emotional side of things.

All the best.

 

[Dazz]

Good post Timmy....I agree with everything you wrote. I wasn't sure I'd ever say that, but there you go.

It's an interesting point you put across....what do people get out of the forum. Obviously different things for different folks, depending on experience / personality / station in life etc.

I personally find it quite cathartic to write down my thoughts and experiences and opinions. I'm not looking for anything in return. I'd like to have a chat with a few grumpy old investors who are interested in what I invest in, but they typically can't drive a computer or are so tight lipped about their operation you'd never learn anything.

Anyway, if you leave after a 100 hundreds posts - that's your decision. Good luck with your endeavours and pursuits in life. I've enjoyed your opposing views, I've certainly learnt something from you.