VIC Huge rent increase regional Victoria

Discussion in 'Property Management' started by Al1979, 2nd May, 2022.

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  1. Al1979

    Al1979 Well-Known Member

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    Hi Guys,

    One of our properties in regional Victoria is due for a rent increase and although the market has risen dramatically the property manager is suggesting only a 5% increase. Against our better judgment we took this advice last year and only did a 5% increase but now the gap between market value and what we are getting has grown even further.

    I am chasing some advice from investors or periphery managers that have seen a huge increase challenged by the tenant. If they go to VCAT does VCAT negotiate the rate or do they just say it’s too high and there is to be no increase?

    Current rent: $500pw
    Market rent in suburb: $630 to $650pw
    Contract status: Month by Month
    Vacancy rate: 0.01% (Impossible to get a rental)

    The tenant pays on time but doesn’t take much care of the property. We would have no issue getting a better tenant currently. The property manager advised that if it was vacant they would be asking $650pw. If the tenant was to vacate that would actually be beneficial as we could give the property a tidy up.

    I know there is a moral issue here which I will factor in but is there any downside to me just asking for it to be increased to $630pw?

    Thanks in advance.
     
    Michael Mitchell likes this.
  2. Michael Mitchell

    Michael Mitchell Well-Known Member

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    Not a charity, do what needs to be done.
     
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  3. momentum26

    momentum26 Well-Known Member

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    Get a property manager who can either make your tenant to pay the higher rent or make them vacate the property with minimum headaches to you, so that a new tenant who can pay the top dollar can occupy your property instead
     
    Michael Mitchell and Al1979 like this.
  4. larrylarry

    larrylarry Well-Known Member

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    Regional Vic commands $650 per week. Sounds awesome.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    You know what market rent is however it's sub-standard due to poor maintenance, will it get $630/wk without bringing it up to standard?

    What's the market rent for similar properties ie in the same condition not the top of the market?

    With the shortage of trades in the regions, how long will it take to get trades and the property up to scratch (if vacant)?
     
    Michael Mitchell likes this.
  6. Tom Rivera

    Tom Rivera Property Manager Business Member

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    No issue at all reverting to market rent, or at least MUCH closer to it.
     
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  7. skater

    skater Well-Known Member

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    I'd put it up. You didn't buy this property to be subsidising someone else's living expenses did you? Either way, it's a win. You get your market rent, or they move out and you can get a better tenant.
     
  8. Al1979

    Al1979 Well-Known Member

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    The house is less than 10 years old, it isn’t substandard. They just don’t look after the yard enough so we pay a mowing guy to go over it every now and again. It wouldn’t require any trades to be re-leased. A mow and a clean at worst.

    Tenant has busted a few taps etc that we have fixed so no issue there.

    Similar properties get listed for $650 to $850 per week and are taken up within a few days. Daily lengthy list of people chasing rentals.
     
    Scott No Mates likes this.
  9. skater

    skater Well-Known Member

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    All the more reason to increase the rent substantially.
     
    Al1979 likes this.
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    @Al1979 Then it's a case of stump up or pack up.
     

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