58.3% rent increase

Just sharing my amazement

My dad has a 3 bedroom apartment in Melbourne CBD. No parking.

The existing tenant paid $600 per week. We asked for $650 per week, but they decided to leave.

The agent offered us to advertise at $800 per week. Since we had quite a bit of time, we thought let's just try it.

Then I saw it is advertised for $950 per week, and contacted the agent, " Do you think is it achievable? We don't want the property sitting vacant too long"

And now the lease is signed for $950 per week, even before the current tenant leaves

Credit to the agent

 

Wow

 

must be more to the story, can you share..BTW, well done!!

 

It's just the jump in the demand for the apartment in CBD + lack of supply of 3 bedroom + good agent

I was worried before, looking at another 3 bedroom apartment in the same building , higher floor and better view listed for $650 pw. And it was leased within days.

 

great..have you seen much capital growth over the years since you have held? I've never owned an apartment, curious on the pros and cons, cheers

 

Interesting result. It can be a combination of things highlighted including underrented previously due to covid or poor demand in areas like Southbank but could also reflect a desperate or poor quality tenant (risk) if they're not properly vetted by the agent.

If that's the market rent, great result and kudos to the agent.

I daresay that a 3 bedder isn't the norm and those looking to downsize in the city would welcome it.

 

My dad bought this apartment from someone who can't settle (nomination sale). So cheaper a bit + save stamp duty.

I tried to find a comparison sale, and cannot find one. But with great rental yield (8%), and other 3 bedroom apartments sold for much higher price, I believe it can get 5-10% capital growth (not pa. but after 6 years )

 

Yeah $600 pw leased in lockdown period. But pre covid market rent was $650 pw. The jump in the demand these days is very surprising

 

Congrats - i suspect stories of this nature may not be all that isolated through 2023

 

Or news articles about how much the rent has increased for tenants (who benefitted at the expense of owners during covid).

 

This is the market correcting itself due to higher interest rates.
Prices down, yields up.

 

Many properties coming off of NRAS are getting huge increases. I have one, it was getting $254pw, went up to $390pw and now six months later increasing again to $465pw.

 

how can that be part of NRAS if the rent is increasing so much?

 

Incentives were paid by the government to have below market rent for the duration of the incentive period to be part of the NRAS.

If it's no longer tied to the scheme, it'd be naive to believe that you would still be under a form of rent control.

 

Read it again.

It is no longer part of the NRAS scheme. Same tenant though.

 

2 BR price has always been 600 to 650 for lower spec

This doesn't surprise me 3BR has no business being 800 or under

 

Buy an IP and live off the rent. Yippee.

 

Wow, I wonder why noone has thought of this before now. Maybe a group of like minded people could start discussing the prospects on say a webchat forum.

 

Absolute genius of an idea. I want to work on this idea.