Rent - why we all need to start raising it.

Would be bloody hard getting ALL landlords on board.
And then there's the case of a few not following it, and it all going back to what it was anyways.
Good thought in theory, but impossible to implement.

 

Look at the example of Moranbah to see the condensed effects of a supply and demand cycle, both owning and renting.

Early owners made an absolute killing, getting $1K+ a week rent on properties they probably bought for up to a couple of hundred thousand. Then sold for top dollar.

Those who came late to the cycle were well and truly burned.
Marg

 

The great property ponzi scheme - investors are piling in & jumping on board in a rising market.

The supply of rental properties slowly increases through new units and houses coming on line. Rents stagnate or drop as there's an oversupply, interest rates increase due to Reserve Bank intervention to temper an overheating market as early adopters exit the market.

The remaining investors are left high and dry with vacant properties bearing all of the holding costs.

 

Yikes Where in Melbourne is this?

I've had a very different experience and have been increasing rent by about $10 per year.

 

Heidelberg Heights. The problem there is that 2x1's are a dime a dozen. Example very similar to mine:

3 Bamfield Road Heidelberg Heights Vic 3081 - House for Rent #420191062 - realestate.com.au

 

I was going to ask if it was your Heidelberg Heights property where you couldn't increase your rent!!!

I know the area very well as I grew up near Rosanna. Do you have one of those older style housing commission homes with a huge back yard? Any chance of a granny flat out back to bump up your rent?

 

The house was virtually identical to the one I linked to. Exact same floor plan, big block but mine had a more modern kitchen. I sold it in late 2015. New owners ripped out the carpet, polished the floorboards and painted and put it back on the market at $300 pw rent. I think it was getting $290 pw at sale. Their gross yield would be around 2.2%!

 

As soon as I read ur title I knew this was where u were coming from, but also know ur next door landlord would rather run u over than lose a tenant too you at any price.

Must have been while, wait what?

 

Of course. Theoretical only in reality market is efficient.

 

Supply and demand is like a seesaw, always finding a new equilibrium based on a myriad of different forces.

At the moment you have the Government, RBA, APRA and the banks all pushing down on one end of that seesaw, putting the brakes on investment lending - hardly free/efficient market at play.

I am not so 'naive' to think that individually anyone can dictate their own terms on rent, but at some point the flow on effects of reduced property investment will have to come through. At the moment there is a heap of regulatory intervention distorting the market, my point is simply that at some stage they may get what they want - fewer property investors and at that time, we may find that there is a shift of rental price setting to the hands of the landlords.

 

Raise the rent? There are people on here who give their tenants movie tickets and fruit baskets at Christmas lol.

 

Hit the nail on the head. Virtually all of the changes implemented to investment lending in the last 18months or so have been very blunt tools. There is a big difference to an OTP apartment in Bris or Melb and a quality capital city inner ring home in an OO area with vacancy rates <2% yet financing for either is suffering from the same regulatory intervention.

 

Without all of those same investors, you wouldn't have had the massive price rises you've probably experienced. It's a double-edged sword and you can't have it both ways.

 

Its never a free market at play. Previously when RBA was putting rates down and past decades of easing of LVRs by banks, easing of service calcs, not to mention negative gearing, investors were not complaining. Real estate will always be regulated to some degree since it deals with a very basic public need.

Just be thankful our gov has not implemented more heavy handed policies like rent control. lol.

 

I think we should all aim to raise rent 10% next rental review. For the good of Australia. Who's in?

 

For the good of my serviceability!
I've found another property I want, but I doubt I'll have the serviceability

 

In my view if one really wants to retaliate against lenders slapping higher rates on investors (and achieving fat margins/profits in the process - while still crying poor about the more expensive borrowing costs they have to pay by accessing expensive foreign capital - even though said new fat margin capital is locally sourced - i.e. via us local investors!!), then hit them where it hurts and simply stop buying properties for a while.

If we don't take out new loans en-masse for a while, then eventually the banks will have to ease up to attract local investor capital again.

So what do you do whilst not buying houses? Sit on your thumbs and do nothing? NO!

You:

- start doing DD on multiple housing markets of interest and studying them expertly so you can strike quickly when lending conditions are more favourable
- consider diversifying your portfolio into other asset classes with much smaller buy-in points that you can use your savings to fund. Diversity is good and healthy!

 

Love It

 

This is called cartel conduct and you can go to jail for it, cartel conduct is one of those things that in free market you can get heavily done by the law and regulator

 

Aren't the banks simply acting as one big cartel anyway?

But as long as they do a government agency's bidding, a blind eye is turned