We pay $450 a week, just got a notice saying the landlord is increasing it by $15 a week. Does that need to be justified or can they just do that?
I'm in the ACT. I know they have to give 8 weeks notice and can't do more than one rise in 12 months.
$15/week rent increase: justified?
[Deactivated] on 29/08/2019 - 09:35
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It's the first rent rise, we have been there nearly 12mo.
Contract doesn't say much afaik, it's all standard and legislated stuff here.
About 8 weeks notice. The legal amount.
How would you go about negotiating?
I am landlord so I would say rent can increase by giving minimum days notice as far lease contract finish. And yes you can bargain because landlord if look new tenant cost extra few $$$ and also time and no gaurentee will find tenant in time.
Good luck hope u find bargain price.
You should be able to request a rent review.
On the bottom of the rent increase letter there should be a number you can call to request an independent review (the review decision is binding in most cases)Thanks, I'll check.
Yes, and the independent review can make the rent even higher.
What is worse, it's legally binding. Bargaining with a landlord is not. Should be extra careful.
What are the current rental prices in the surrounding area?
Pretty variable, some are higher some are lower.
How about the rent for comparable properties?
Canberra rents have climbed. So it isn't unreasonable and really they are well within their rights to raise it. But as with all things it is up to you whether you accept it or move out, or if you have been a perfect tenant perhaps try to bargain.
How long have you been renting that house for / at that price?
Almost 12mo at this price.
According to these guys, the average apartment rent in Canberra June-18 was $440, June-19 was $465…
https://www.rent.com.au/blog/rental-snapshot-june-2018
https://www.rent.com.au/blog/rental-snapshot-june-2019
Are the things that you like about your current home worth an extra $15/week to you?
If not, you have an option to move to something else that suits you better (e.g. cheaper; better location; larger; smaller; etc.)People that own the homes they live in don't have that flexibility if their mortgage rates increase, or if their Council rates increase, or if their Body Corporate fees increase.
Not really, we could get an equally nice place for the same price we are paying now. It's just a pain in the ass to move.
So, is $15/week extra worth more or less to you than the pain in the ass to move?
@[Deactivated]: It isn't necessarily cruel.
The property owner is running a business, and most likely has multiple cost factors that would be impacting their balance sheet. To offset those, their income needs to increase.I do sympathise with renters, as this can feel like a constant battle to find an affordable home without the security of permanent tenancy.
But not all investment property owners are cold hearted tycoons either. It could be that the owner is relying on a positive cash flow to fund their own lifestyle.@[Deactivated]: There's nothing cruel about it. They can charge more, so they are. Just like if you can pay less for a product, would you willingly pay more?
@[Deactivated]: Omg not cruel at all, it’s a 3% increase after 12 months. Seems reasonable. If you don’t like it, negotiate (try for $10 or something), otherwise move - but I bet the cost of moving is greater than the cost here.
Plus, you would almost guarantee the other places at $450 will jack their price at the first opportunity. Prices tend to be.m a bit lower to get tenants in, and increase to make up the difference down the track.
Welcome to renting life, we’ll welcome to life I suppose
@[Deactivated]: Cruel? Haha. Go buy a house yourself and take on the risk…. entitlement attitude…. wow.
The mortgage payment ( if the owner has one ) have decreased in the past 12 month.
The rent should decrease, not increase.… Oh Wait …
Wrong country
This is the country where a renter has no rights.
No.
The owner's mortgage payments may have decreased in the past 12 months (if they had a variable rate from a lender that reduced their rates on investment property mortgages).I think almost all other incurred costs would have increased in the past 12 months. Those same costs will most likely increase further in the next 12 months.
It is a business. If a business does not keep up with increased costs, they will go out of business.Renters have plenty of rights in this country, and it is getting better, but no-one has suggested that rent control is required.
"Renters have plenty of rights in this country, and it is getting better, but no-one has suggested that rent control is required."
Wow, which bubble do you reside in? Have you not read about the NSW Building Commission Enquiry and problems with properties? Water damage, etc and not being rectified? Retaliation and little protection with Evictions? Ignoring messages and emails multiple times over repairs?
You may not be like that but there are plenty of unscrupulous landlords out there.
But in terms of this topic, I think the rent increase is reasonable unless they are not attending to matters/repairs.
Plenty of rights?
What is the minimum notice period?
How often can Landlord increase rent?
Does the landlord need to give a reason to terminate? What are valid reasons?
I know that people here in Australia think that renter have rights, but that's nothing compared to other countries,
where housing in not an investment option, but a basic need.
haha if you think renters have no rights then you should try being a landlord. You have no idea!!!!
Amen billybob1978.Try getting anywhere when a tenant causes malicious damage to a property and then skips town with both the damage caused and rent in arrears remaining.
What? Australian rental rights are lower than virtually every other country in the OECD. If you think we have tough laws, try having a look at Germany. Then again, Germans generate their wealth through productive enterprises - Australians are unintelligent rent seeking parasites in comparison.
An increase of 3.4% doesn't seem excessive.
The property is located in the ACT where they are steadily decreasing stamp duty - unfortunately they are steadily increasing rates which also increases land tax. Thus every landlord has significantly increasing costs each year from the ACT Government. Often the land tax takes 2-3 months of rent to cover if it is a house - or 1 month for an apartment.
I see, bloody thieving government again.
Mmm… investment property costs are more than just interest rates.
- strata costs increase
- insurance costs increase
- rates increase
- land tax increases
- water costs increase (not always passed to tenants)
- interest might decrease
And - $450 might have been a starting rate to get the tenant through the door, and may have been making a loss to start with.
I know, we used to own a couple. :)
We never put up the rent for good tenants though.
Landlords only invest because they're factoring future increases in rent/value. Without this "speculation" there wouldn't be anywhere for tenants to live.
Landlords, such as myself, purchase because their investments will pay off in the future, not because they do now.
Tell us how you go looking for a rental property that gets cheaper over time.
Not what I meant, but ok.
Pay with your feet. Move out
Ok no don't cut off your feet…
Hope I wasn't too late.
You're looking at this the wrong way. It doesn't need any justification.
Inflation… you should expect 2% increase at least per year right?
if anything the property should be getting cheaper as it ages
At least in stable economies like ours, the price of properties will not age like that of bread, but like that of wine.
Thing is, it should decrease, as it ages. That is correct.
When the Landlord then maintains the house, by putting in a new Kitchen, to replace the 40 year old kitchen, the rent should also increase.
What the landlords instead does, is to increase the rent a bit every year, and when massive costs come up they increase the rent massively.Most house owners, also dont follow the generally good rule, of setting 0.5% of the haouse value away, for maintenaince.
And when some "unforseen" expenses occurr, they are "out of money"By the way, my opinion is that nobody should make money through residential property.
@cameldownunder: I going to have to fully agree with your opinion.
I would also like to state that it usually does not go that way, as unfortunate as it might be.
Check like for like properties. Amenity, land size, suburb etc, also there is a formula for max rent rise that is reasonable, cant think what it is at the moment.
Does not work: if every-one increases, without reason, then an increase "is justified" while, really, nothing has changed to the house and surroundings, really.
Unless there is a part that says that rent reviews will move according to the market,
can't landlords increase the price by any amount they feel like? It's your choice to accept it or to move on.
increasing it by $15 a week. Does that need to be justified or can they just do that?
if it was decreased by the same amount, would you ask the same question?
Absolutely, I would assume something had changed!
What a stupid response.
Just got a $10 increase from $410 to $420, we negotiated from $420 to $410 originally. So wasnt really a surprise. You can get it indepently reviewed as others have said. $15 isnt a large jump and probably in line with the rental market where you are.
You didn't mention if you've been in the house at $450 for 6, 12, 24+ months. When was the last increase if ever?
Different areas are gonna have different increases, my investment property decreased in rent 2 years ago, and we have agreed to hold it for another 2 years as we have good tenants.
52*15 = 520 + 260 = 780 …. My salary did NOT increase by that much last year, so I would disagree, and say 780 a year is a big sum
Sorry, I wasn't talking about your salary, but the rental market… In the last 19 years not once did I get a pay rise less than 780 a year, maybe change careers?
You can make a counter offer.
Could be worse …
In South Australia a landlord can increase your rent by 10% every 6 months, so $450 would become $495 after 6 months … but wait, it gets better, the rental increase at the 6 month mark doesn't care if you have a 12 month rental, so if you want to move out, it's considered a breach of your tenancy …
A friends wife was an agent and would always recommend her clients jack up the rent at 6 months, then leave it at the 12 month renewal period, then jack it up at the 6 month mark again … they get used to paying more for 6 months, then can't be bothered moving out
That appears to be incorrect. At least since 2014.
https://www.sa.gov.au/topics/housing/renting-and-letting/ren…
Since you’re agent friend would likely get some lovely commissions on the releasing fees from unhappy tenants moving out at 12 mths, I’m not surprised they recommended 10% bumps.
It's an open market. Prices are set by supply/demand and nothing else needs to be 'justified'. You can always negotiate and make counter offers.
The landlord has a fair risk as well if you put yourself in the their shoes. $15/week = $780 a year, that may not even enough to cover their letting fee and advertising fee if they piss you off and have to look for another tenant, plus all the losses (i.e. potential rental income, mortgage, body corp fees, council rate, etc.) for leaving the property vacant every single day…
So why make the raise if it's so risky?
That means they are fairly confident with the price, or they just want to test the waters to see if you would suck it up.
You are in a better position in negotiation when you know they are not really 'nothing to lose'. Now you need to do your own research and make some counter offers. Tell them you would like to stay there for longer term if the price is right. Most landlords love to hear 'long term'. It will be either:
- They will back off if what they ask is too much.
- They refuse because they are confident they will found another tenant quickly and willing to pay the higher priceGood advice, thank you.
Many reasons.
Sometimes the landlord doesn't like the tenant because they are a pain in the arse. Rather than asking the tenant to leave the tenant does so o their own accord.
Sometimes tenants roll over and pay the increase without negotiating. +$780 for not much work.
Maybe the landlord wants to align their rental to the current market.Sometimes the landlord doesn't like the tenant because they are a pain in the arse.
If $15 a week can soothe the pain it's not really that bad.
It's almost always the real estate agents who are behind the increase. Majority of landlords rarely do it on their own accord. Unless they started it quite cheap and always had it in mind to increase rent. Depending on contracts with agents they might get a higher percentage of the increase. So say one franchise store has 40 houses for rent if they get $5 per week extra out of each one that's a big difference. Then times that by all branches across the country they have and it's worth a tonne. Think of it like Maccas when they ask would you like fries with that.
So "cruel", sounds like someone who is entitled to take it to the Supreme court. Go for it.
After reading many of your comments, I think you believe that others owe you a lot.
How do you know there is no reason?
Because rental prices have gone down here not up?
Its the landlords house, he can price it however he likes, he doesn't have to care about what you can afford or what you want to pay.
There can be some specific ways you can argue it but you'll likely lose, but even if you win, the landlord can just use one of the many ways to get rid of you.
He can raise/lower the rent and you can leave/stay, both have options. Nothing requires justification.
Use it as motivation to buy a place.
Ha. I can't afford a place anywhere I would like to live, why bother?
Melbourne or Sydney? Anywhere else is reasonable. I'd personally rather live anywhere other than those 2. If you can afford 465 a week in rent then you could be paying off your own place rather than someone else's
Negotiate - offer $5 a week more. Maybe you'll settle on $10. If the landlord won't play ball then leave and move into one of these places that supposedly decrease rent over time.
No justification is needed to raise….although we all know house loans are very low rates
we have been there nearly 12mo.
So you're almost at the end of your current lease? You can decide to leave at the end of your lease or sign on to the new lease agreement at $465 per week.
I would suggest looking at other houses which might suit your needs, make a list and send an email to your current RE with a counter offer of what you believe is a more appropriate rent increase based on what is available on the market. If you can't come to an agreement , move out to one of the properties on your list.
Landlord is ripping you off. I had tenants on the same rent for 3 years as they were excellent tenants and I didn’t want to lose them.
It sounds like your tenants scammed you to keep the same rent for three years.
Not at all, I've been a landlord for 10 years so I know what it takes to keep good tenants. Why put up the rent and risk losing them? The $500 was the median price too!
Canberra Vacancy rates are some of the lowest in the country. Landlords can comfortably pick and choose here, would have to be an awesome tenant to sacrifice rent money for.
@PixelPaul: Regularly published on most of the real estate sites and the newspaper. A 30 second search will turn up the vacancy rates for any major city.
Either negotiate for less or say you don't want to pay it and will move out. If they don't have someone in there for even two weeks after you move out that already will lose more than all the money they would have got through the year with the increase. Huge risk to not have someone paying rent! Unless the owners are idiotic with money or the real estate agent doesn't like you and will manipulate owners into letting you go. They will at least come to some sort of compromise. Only way it wouldn't happen is if you haven't taken care of the house properly.
This seems pretty reasonable to me. The ACT market has been increasing a fair amount lately. I have a rental property there and increased it by $15 this year, and $10 last year.
I have a rental agent and they were the ones suggesting the increases based on the market so didn't have to prompt it myself either.
If the market is going up then the market is going up… you can either choose to move out to somewhere cheaper, or just accept it as it is. As others have stated, I didn't buy an investment property in order to make my tenants lives easier - but for profit purposes.
That being said - I would agree with the negotiation tactic. I'd be happy to accept a $10 increase instead of $15. To be honest, I wasn't expecting such a large raise in rent two years in a row so I'd be happy with no increase but if the real estate agent is going to push for it then I'm happy for them to take care of it.
My tenants have been there for 5 years and I haven't increased it once. They pay on time and look after the place reasonable well.
I should increase the rent as it's below market rent but for the hassles and risk of getting a dud tenant, I'd rather receive $500 or $1000 less p.a.
If you're a good tenant and can be bothered to move, I'd call their bluff. Tell them you're happy to stay but at $5 a week extra or you will move out.
The only winners if you move out are the Agents for the extra letting fees.
I'm in the same boat, I think I could probably get away with a 15% increase in rent but at what cost. To have my excellent tenants move out on me and get a dud in.
I had crappy tenants twice. Fortunately no major damage, I was going to renovate it to live in anyway.
But for peace of mind, I'll happily accept less rent.
They are also pretty reasonable on repairs. Of course anything major or urgent I fix asap, but if it can wait, they are ok it doesn't get done asap.
Yeah I think I'll also renovate when these guys move out and then bump the rent up to whatever the market rate is at the time.
Hopefully that's not for a long time though.
Well said! My friends have been renting for years and the owners are so happy with them they have never raised the rent
yep that is a 3.3% increase annually if anything your landlord could even push it to $25 extra a month which is 5.5% annually and it would still be acceptable….
HOWEVER it also depends on if you think it is worth paying the money otherwise you can move…but legally you got no recourse if you ask me
Call their bluff. You do hold some power. $15 a week increase is $780.00 a year more for the landlord.
Therefore if you move out and the property is vacant for two weeks then the landlord loses out (if rent is $400.00 per week).
It also depends on what the rental market is like. Do places get snapped up quick?
Places do get snapped up quick, yeah. High demand, but the prices have gone down recently as there have been a lot of apartments built in the last 12mo.
That's why I'm annoyed about the raise, because I could easily go out and get a place just as good for the same price but it is a massive hassle to move.
Everyone on here makes that sound like a very simple decision, but the reality is, in both options you are worse off than you started through no fault of your own.
Everyone on here makes that sound like a very simple decision, but the reality is, in both options you are worse off than you started through no fault of your own.
What would you like us to say/ do,OP? We can't convince your landlord not to raise the rent nor can we decide whether it is less of a hassle for you to move or to pay the rent increase.
I was asking if it was justified and what everyone thought about it.
You may note if you read carefully that I never asked what I should do.
I was asking if it was justified
I don't know much about the rental market in the ACT. So can't answer that.
and what everyone thought about it.
In Melbourne,where I am, a yearly rental increase of $10-$15 per week is the norm.
That being said, I haven't increased my tenants' rent for the last 3 years because I knew they couldn't afford it, due to a change in their circumstances. They're good people and good tenants so we were happy to renew their lease without renegotiating the rent.
Talk to the RE. You may be able to get them to convince the landlord that it would be in their best interests not to increase the rent.You did ask how you should go about negotiating with the landlord in one of your comments. But ok. shrugs
All the best, OP:)
Was in a similar situation recently; been in a 3bdrm rental for 2 years, after the first year they raised it from $650pw to $750pw to "correct the rent in line with the market", and this year another 4.66% to $785pw
Compared to other 3bd rentals $750 seemed high already but we really did not want the hassle of moving, and the median rents in the suburb dropped 4% so it seemed a little excessive. Similar rentals were showing as listed for weeks on domain/realestate so really looks like a renters market, with almost every rental dropping their prices.
Asked landlord for a smaller or tiered increase over time based on the above, also tried asking for a smaller increase if we signed for 3 years - but landlord wouldn't budge and we ended up moving out to a place across the road, paying $700 for a newer, bigger property with A/C (we actually got $30 off their asking rent too)
The old property has been listed for 4 weeks so far; the lost income from being vacant is almost greater than 2 years of the increase.
Sometimes you just can't help stubbornness
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What does your contract say?
When was the last rent rise?
How much notice have they given you?
If you want to stay have you tried negotiating?