Landlord Increasing Rent over $85 a Week, Should We Move?

LCreamsoda on 28/04/2022 - 15:40
Last edited 28/04/2022 - 16:09 by 1 other user

hi guys just want some opinion on the issue. We are currently renting a 2bedroom 1 bathroom apartment in South Yarra VIC Our 12 months contact is coming up with our apartment in SouthYarra and the landlord has contacted us to increase rent from $500 to $585.

We rented the small place (small kitchen that wont even fit a large single door fridge only 1m kitchen bench space for food prep) paid above rental market price during the height of the pandemic with most of the newer apartments going between $350-$450 at the time thinking paying regular pre-pandemic rates will likely to get our lease renewed as moving is a major pain and are not keen on doing it every year. now the landlord has said the market is shifted and the agent has gave them a suggestion that a $85 increase a week is market price, which i think its insane most newer apartments has gone back to around $500. we like the area and prefer not to go through the trouble of moving.

Is our landlord ultra greedy? should we find a new place or even try to negotiate the rent?

Poll Options

  • 525
    Yes
  • 19
    No
  • 75
    Negotiate
Home & Garden

Comments

  • spiff on 28/04/2022 - 15:43
    +88

    If you can rent a comparable apartment for $500 in the same area then move there.

    • tallkid123 on 28/04/2022 - 16:12
      +9

      OP, I think you'll get a real answer if you went on Realestate or Domain and did a South Yarra rental comparison there.

      • Creamsoda on 28/04/2022 - 16:47
        +3

        i did. there are few thats going for high $500s(either with excellent view) or large layout, most are still around low $500s high $400s. pre-pandemic level rent is around the low $500s level similar to CBD and inner melb prices.

        • chrisn26 on 28/04/2022 - 16:57
          +1

          Have you checked what your rental agreement says regarding price increases? It could be the case that the owners want to live in the property or do rennovations and this is their way of getting you to vacate. You should speak to your landlord/real estate agent.

          • goraygo on 28/04/2022 - 21:57

            @chrisn26: If you read your rental agreement, the owner has most rights. They can tell you to vacate and give you 60 day written notice. Nothing much you can do at all.

          • alxr0101 on 30/04/2022 - 00:26
            +6

            @chrisn26: It's a rent increase. If the owner was moving back in, they would otherwise say that.

            It's a rent increase, deal with it as just that.

            Negotiate (with facts) or move.

        • Windows98 on 29/04/2022 - 15:05
          +7

          Why are you still in the current property then if there's better deals out there?

        • CalmLemons on 29/04/2022 - 20:30

          Honestly OP you sounds like a really nice person unlike similar posts on ozb.

          To be honest, why are you paying so much for an apartment, especially in Youth Yarra.

          Second question, why on earth would you choose to live in south yarra?

          • fredblogs on 29/04/2022 - 21:22
            +1

            @CalmLemons: Why wouldn't you?

            • CalmLemons on 01/05/2022 - 02:31
              +1

              @fredblogs: Apartments are terrible investments.

              South Yarra is the yuppy suburb capital of Victoria.

          • Creamsoda on 29/04/2022 - 21:44
            +2

            @CalmLemons: I'm happy to pay for market price to live around here. both our parents bought houses here, fortunately they got a good deal few years back near the botanic gardens. unfortunately for us we can't afford to buy a house near them. they help out with looking after our baby so we like to stay close. we refused their help with our deposit and prefer to do it our selves.

            I've got a investment house in outer suburbs so as an landlord my self i know i would never rise the rent like this, unless i dropped the rent well below market during the pandemic but i would of told the renter before hand the price will likely rise X amount when its over. We got a decent income to afford to rent a 3 bedroom house here but decided to save a bit renting smaller apartments to one day afford a house in the area.

            i got feeling the agent/landlord prob think with our income and savings this rent rise is nothing, so they went hard on it.

            • serpserpserp on 30/04/2022 - 15:01
              +3

              @Creamsoda:

              fortunately they got a good deal few years back near the botanic gardens

              lol that's about 4-6mln of property right there for two houses. Maybe even more now.

            • ely on 30/04/2022 - 21:20
              +2

              @Creamsoda: "got a[n] investment house"

              stopped caring at this point, just now entertained by landlords screwing landlords

            • CalmLemons on 01/05/2022 - 02:34

              @Creamsoda: Honestly sounds like you've got enough education and degree of verbal articulation to not worry about $85/week.

              It's nice that you refused the deposit and want to do it yourselves, far cry from the entitlement/blame the world for our own problems post typically on ozbargain.

            • greatlamp on 01/05/2022 - 07:05
              +1

              @Creamsoda:

              we refused their help with our deposit and prefer to do it our selves.

              Take their help, promise to repay them.

              I think you are harming yourself financially by not accepting their help.

      • pandadude on 29/04/2022 - 10:34

        I agree but rent always increases on renew because of the convenience factor.

        Saying that the rate looks a bit high and people should negotiate and not be willing to move.

    • truebunny on 29/04/2022 - 17:40
      +2

      keep in mind the moving costs and time though. best would be to negotiate by giving examples of similar rentals on market at lower costs

  • spackbace on 28/04/2022 - 15:44
    +80

    A 2x1 appt, that you've only been living in for 12 months shouldn't be hard to move. $85 x 52 = $4420 over the course of the year, which will easily cover moving costs

    • the4thzodiac on 29/04/2022 - 19:38
      +1

      sense!

    • ribze1 on 29/04/2022 - 19:47
      +2

      Agree, the LL doesn't have the power they think they do.

    • Blitz001 on 30/04/2022 - 18:02

      Did you include the 4 weeks notice you have to give and will probably only give once you’ve signed a lease for a new place? Unless you wanna roll the dice and see if you can either a) find a place that will let you move in in a months time, or b) wait til the 4th week and try to find a place asap.

  • AustriaBargain on 28/04/2022 - 15:46
    +16

    Move. If it's worth $85 a week extra to the owner but not to you, your only choice is to move.

  • GG57 on 28/04/2022 - 15:46
    +13

    Is $85 > or < to you than the trouble of moving?

    • markathome on 28/04/2022 - 22:34
      +6

      I think you'll find it's not a one-off payment GG57.

      Although if you are suggesting OP pays one week of rent at the new rate and then just sits on the place until eviction maybe you have a point.

  • garetz on 28/04/2022 - 15:47
    +1

    Move out and move on, if you rent then dont expect to stay anywhere long term and you wont be disappointed.

    • cookie2 on 29/04/2022 - 12:43

      Fair but you don't expect to have to assess moving after just 12 months either.

      • Skinnerr on 29/04/2022 - 22:24

        You do on the breadline, which OP clearly is not.

        • serpserpserp on 30/04/2022 - 15:03
          +1

          OP doesn't work at the TipTop factory?

      • cadwalader on 30/04/2022 - 14:59
        +1

        We do on a 12 month lease, no reason to expect anything more. Managing our expectations and preparing accordingly is one of the easiest things we can do.

      • kensaiD on 01/05/2022 - 16:00

        I've moved once or twice a year, every year, for almost the past decade. It's mostly due to increased rent prices or owners selling / moving back in.

        Only once have I moved because I wanted to, every other move has been to offset costs.

  • dogboy on 28/04/2022 - 15:47
    +4

    $500+ to rent a 2x1 apartment? That just sounds ridiculous. I hate to think how much extra they will go up if interest rates are increased this year as they are predicting.

    • EightImmortals on 28/04/2022 - 16:32

      This year?
      I read they were going up next week.

      • OzCheapo on 28/04/2022 - 16:43
        +2

        It's south yarra

      • michaelTito on 28/04/2022 - 21:15
        -7

        wasnt the interest rate suppose to go up last week and the week before that aswell?

        • Longtimescroller on 28/04/2022 - 22:28
          +7

          Reserve bank cash rate decisions are made on the first Tuesday of every month. It is almost certain that they will start to rise in May or June by 0.25% at a time. Money markets have already factored in about 2.5% in rises over the coming 2 years and this ultimately affects the borrowing costs for banks on their fixed loan offerings. If you look at getting a fixed interest mortgage now compared to 6months ago you will have noticed a huge increase.

    • Talonparty on 28/04/2022 - 23:13
      +9

      Interest rates don't feed into rental prices. They're as low as can be and have been for years but rental prices have been going up. How many places that have been fully paid off by the owner are available at a discount?

      The truth is it's always as high as possible to squeeze as much as possible out. Can't really go much higher than that no matter how high the rates go…the only thing that might happen is speculators might start leaving the market which is a win in my books.

      • Domingo on 29/04/2022 - 08:06
        +1

        Yes and no. The Australian dream of investment property ownership by leveraging yourself to the hilt (articles like "See how this dishwasher owns 16 properties at 27") will come to a head when they can't afford even modest monthly loan payment increases because of the expectation that rates would stay at 0.1% forever.

        • techno2000 on 29/04/2022 - 08:35
          +3

          Loan repayments are one thing.Nobody talks of the other bills involved like the maintenance costs of the property especially if its an older one. The costs are huge.

          • Quantumcat on 29/04/2022 - 08:46
            +2

            @techno2000: They definitely are, I recently had to buy and install a new oven as well as retile the bathroom. Not to mention strata and land tax

            • serpserpserp on 30/04/2022 - 15:04

              @Quantumcat: Which is all tax deductable.

              • alexm1 on 02/05/2022 - 19:47

                @serpserpserp: just repair is tax deductible, not capital investment,so only replacing oven is a repair and you get 40 Cents back from your tax for every Dollar you spend so basically losing 60 cents for each dollar spend.

                • techno2000 on 03/05/2022 - 08:49

                  @alexm1: You only get 37 cents back if you are in 37% tax bracket which means you are over $120k individual income. Many including me are below that and can only buy investment property because of double income couple.

          • BlahBlahBlaah on 01/05/2022 - 01:17
            +2

            @techno2000: Exactly. Just offloaded my investment property (older house) for this reason. I spend about $13k per year on repairs, insurance, rates, water bills, agent fees, etc. Plus im out of pocket close to 1k per month on the mortgage.
            Yes there are tax deductions, but that only helps reduce my losses, but still a loss. Add to that the fact principal payments aren't factored into deductibles, it's actually a double whammy. I haven't even mentioned whinging tenants.
            And as a final insult, I'm up for CGT on the profit, and also the selling and buying fees of the place. When you actually work it out, you don't make that much money on investments if they double in value in 10 years. It's really just forced savings, and being able to purchase something with money you don't have. Much better return (and far less headache) in the share market to be honest, and much more liquid.

            • serpserpserp on 04/05/2022 - 16:04

              @BlahBlahBlaah: How about you tell us what you charge per week on rent then we can see if 13k per year holding costs is a big dent.

              If your property has doubled, you should not have sold. You should be looking to buy more with the equity. This investment property riches game only works out if you keep adding properties and eventually turn a positive cash flow position.

        • rektrading on 29/04/2022 - 09:06
          +3

          Why are people so quickly assuming that someone that has accumulated 16 rental properties isn't financially savvy enough to have proper risk management?

          The probability that property hodlers getting liquidated is lower than borrowers that can struggle to scrape together an 80% LTV.

          • Mr Haj on 29/04/2022 - 14:18
            +1

            @rektrading: How do you figure that? the person with 16 properties is dependent on the property market. Their income would mostly be derived from the property. If interest rates increase, their mortgage repayments increase, but their rental income does not magically increase.

            Meanwhile your average Joe with 1 property which they live in does not depend on the property market to make mortgage repayments.

        • Talonparty on 29/04/2022 - 23:31

          No worries, you can negatively gear it at the expense of the taxpayers…and hit your tenants in the pocket twice!

          • Domingo on 29/04/2022 - 23:35

            @Talonparty: Until you put your rent up $85 per week, your tenants post about it on OzBargain and move out and leave you with a vacant period of no income and reletting fees.

    • TilacVIP on 29/04/2022 - 09:01
      +1

      Exactly. This is what happens when stupidity has no boundaries.

      Rates reduces way more than reallyt needed by the RBA, buyer going way overboard on price they paid for housing [image $200K plus over reserve in some cases], thinking low-interest rates will last forever, and now the sh!t is starting to hit the fan.

      • serpserpserp on 30/04/2022 - 15:06

        thinking low-interest rates will last forever,

        I don't think most people think that. I think they literally just don't think about it at all.

        • greatlamp on 01/05/2022 - 07:10
          +1

          Exactly, people could borrow 200k more, so they spent 200k more. Their budget is always the maximum a bank will give them.

    • parcus on 29/04/2022 - 10:26

      It's funny you mention that, first thought on my mind when I saw the price was that's cheap and South Yarra seems like a fun area; I'm in inner east Sydney in a rather happening area and walking distance to the CBD, my last studio I rented was $500/wk (but had great views), a 'good' 1 bedder will set you back $700+/wk comfortably

  • rektrading on 28/04/2022 - 15:50
    +10

    Move out and let the landlord hodl the 👟box

    • Kangal on 28/04/2022 - 23:30
      +2

      And put all that money into crypto. Who even needs a house

  • Hardlyworkin on 28/04/2022 - 15:51
    +5

    That was nice of you to donate extra money to your landlord for the past year. Unfortunately you can't go back and change that decision though hopefully you learn from it.

  • Trying2SaveABuck on 28/04/2022 - 15:54

    that is a pretty big jump but depends on the area and cost of other rentals

  • Jimmycfc on 28/04/2022 - 15:57
    +1

    Its worth trying to haggle down to something you are more comfortable with, might not work but worth a shot if you like the place

  • [Deactivated] on 28/04/2022 - 16:02
    +2

    That's a big increase. In SA mine went up $5 a week in Feb after three years with no change. I'd be looking to move on.

  • boomramada on 28/04/2022 - 16:02

    Is our landlord ultra greedy? should we find a new place or even try to negotiate the rent?

    Step one : check current market condition? Check current price within the same area. If it's same as what's landlord suggested, landlord is fair?
    Step two: based on your finding, if not that much negotiate ?
    Step three: Move out ?

    Or you want us to do the home work for you?

    • goraygo on 28/04/2022 - 21:59

      Not sure why you got down voted.

      • boomramada on 29/04/2022 - 10:00

        I think people in this forum think landlord are evil in general lol
        I have been on both side of the coin, as tenant as well as landlord.
        As landlord, I expect agent to do their research and advice me whether to increase or not. Else they not doing a good job.
        They usually have some idea about current letting rates, market etc.

        As a tenant, you need to consider the location, current financial condition and covenant. I don't think OP has consider any of this and just try to question the landlords action.

        It's a balancing act, for landlord, you need a good tenant that last long within the current market rent. Else you be paying for possible damages, loss rent, advertising, been vacant etc.
        for tenant, it be more personal, not just the pain of packing and unpacking, relocating.

        • kensaiD on 01/05/2022 - 16:01

          For what it's worth, I've had only one good experience with my landlord. Almost all my experiences have been negative.

          I don't doubt that there are good landlords out there! And experience is all anecdotal, but the moment I moved out of the country and into the city, all my experiences went to shit.

    • h4zey on 29/04/2022 - 15:43

      let me revise that option:

      step 1: post it on ozbargain
      step 2: wait for reply and some good Samaritan to do the work for you
      step 3: make decision

  • Donaldhump on 28/04/2022 - 16:09
    +3

    simple business decision

    is the rent you could save worth the hassle and cost of moving?

    • Mokr on 29/04/2022 - 16:13

      will rents fall later this year given cost of living pressures? if so hang on and wait

      • greatlamp on 01/05/2022 - 07:18

        I think It's going to be very hard to get the market rent to decrease, the majority of landlords will hold out. The stereotype investment property owner who is mortgaged up to the eyeballs is only a small proportion of the market, most landlords can afford to leave their place empty for a month rather than lower the price.

        I Expect news articles about a 'renting crisis' and 'shortage of rental properties' which asks the government to give MORE subsidies to home owners, the actual problem of unaffordable rent will probably be glossed over by the mainstream media.

  • freefall101 on 28/04/2022 - 16:11
    +3

    I would -

    1. Counter with an amount you're happy to pay
    2. Challenge the rent amount with Consumer Affairs then go to VCAT (after step 1 is done first)
    3. Leave if it doesn't come down

    Definitely negotiate, unless you're a crap tenant they don't want you to leave. Last time they tried to increase my rent I sent a reminder of all the things that really need fixing that should have been done already (non-urgent) and suddenly they were fine with the old rent price.

    • Creamsoda on 28/04/2022 - 16:27

      don't think the landlord will accept it since their rent increase is so out of our expectation. the point of my post is pretty much asking for feedback on whether is worth staying on with a landlord that will hike rent like this.

      they want us to stay since we keep the place clean and is very accommodating with maintenance issues.

      • freefall101 on 28/04/2022 - 17:03

        I think it's worth staying until the hike actually goes through. If you negotiate it back down again, stay as they're reasonable but just looking at a cash grab. If they don't, time to leave. Nothing lost by trying to negotiate down.

      • jjjaar on 28/04/2022 - 17:29

        the point of my post is pretty much asking for feedback on whether is worth staying on with a landlord that will hike rent like this.

        What will stop them from doing it again in 12 months?

      • bashar20 on 29/04/2022 - 06:59
        +7

        My advice is to move out. 2 years ago, my landlord was not willing to drop rent by 10% despite rents dropping around 20% in the area due to surplus in supply.

        I ended up moving out. They ended up leasing it after 4 months from vacating the unit. And they only achieved that after they incrementally dropped the rent 5 times discounting more than 20%. That was a good lesson for the greedy landlord.

        • 82norm on 29/04/2022 - 12:22

          He could probably afford it and neg. Gearing would have taken care of the rest.

      • Mr Krinkle on 01/05/2022 - 16:49

        In my previous rental I was paying 500p/w for 18 months and the owner wanted to increase it to 575p/w.

        I wrote an email outlining the issues I'd had to deal with along with why I thought 500p/w was fair rent.

        The real estate agent came back with 520p/w which I agreed to.

        Negotiate and include similar rental listings to back up what you're comfortable paying. Don't be afraid to offer less than what you're currently paying if your research indicates that's where the market is.

    • mrhanky71 on 30/04/2022 - 09:17
      +1

      Why would you waste VCAT’s time with something like this?

  • Quantumcat on 28/04/2022 - 16:20
    +23

    If you're thinking of moving anyway, try negotiating first.

    On my rental, the agent upped the rent without even asking me then the poor tenant submitted a long letter about why she couldn't afford that much for various reasons and to please not increase it quite that much, I was shocked and told agent not to increase it at all!!! As I hadn't even requested that in the first place!

    It is quite possible this increase has come more from the agent than the landlord who probably doesn't have any particular need to increase the rent and they will be happy to only increase it by $20 or $40 or $50. Good tenants are worth keeping even for less rent. The next ones could easily destroy stuff and cost way more than the extra they are asking

    • Xistn on 28/04/2022 - 16:23

      Ya Agents are greedy MOFO's

      For OP - you can get better for less further out.

    • JimB on 28/04/2022 - 16:32
      +1

      My agents always asks me prior if I wish to increase it mid tenancy.

      Only once- $10, in the past 15 years due to increase in cost.

      Now with low IR, it's positively geared, I don't really need the money from the rent, I just need the property not to cost me anything to own.

      You're correct, good tenants are worth keeping at lower than market rent.

      "The next ones could easily destroy stuff and cost way more than the extra they are asking"

      Because I have landlord insurance, if the tenants are going to destroy the house, I secretly hope they do a really good job.. free/cheap renovation. I've never claimed on landlord insurance policy.

      • OzCheapo on 28/04/2022 - 16:44
        +1

        lol… i would be excited to take up the offer .. but i dont think getting charged for dstruction of property will look good on my resume

    • Jason Genova on 28/04/2022 - 16:51
      +7

      you sound like rektrading

      • gromit on 28/04/2022 - 23:39

        It is just reality. It is a business investment to most landlords as such they are looking for the best return on that investment.

        • SupeNintendoChalmers on 29/04/2022 - 16:11

          If best return means losing a good tennant and having an investment not producing any returns for a fair period of time, then fine.

          • gromit on 29/04/2022 - 16:16

            @SupeNintendoChalmers: Obviously that isn't a smart investment if that is the end result. However if they know that is the market rate then they are most definitely better off even if they lose 1 or 2 weeks rent.

            • SupeNintendoChalmers on 29/04/2022 - 16:26

              @gromit: @gromit I find most investors are greedy (overleveraged) or have negatively geared properties, case in point.

              I have one modest 3 bedroom home that I rent out for $400 per month. up until last December it was $380, but my tenant is a great single mum so I knew that upping the price significantly would cause undue stress to her. Comparable homes in the area are rented for ~$450-500, but I know the value of a long term tenant. Too many people overleverage themselves and negatively gear properties. I positively gear my investment, because frankly I believe negative gearing is immoral.

              • gromit on 29/04/2022 - 21:09

                @SupeNintendoChalmers: good for you, but that makes you a charity not an investor. Nothing wrong with that, in fact it is highly commendable that you give to those less fortunate.

                • SupeNintendoChalmers on 30/04/2022 - 12:27

                  @gromit: I am a investor though, still make a small profit and have very little debt to my name. Always been happy to make a buck, but not at the direct expense of others.

                  • gromit on 30/04/2022 - 15:42

                    @SupeNintendoChalmers: The nature of investment is you are always making profit at the expense of others. be it small or large. How you choose to use that profit is entirely up to you, you choose to give your profit to your tenant.

    • freefall101 on 28/04/2022 - 17:08
      +10

      Greed: intense and selfish desire for something, especially wealth, power, or food.

      If they're upping the rent because there's a real need to, such as fear of interest rate rises meaning they could go under on the property, it's not greed.

      If they just want to milk more money out of it because they think they can, then it is greed.

      Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy. You should just own your greediness rather than try pretend you're not though.

      • tsunamisurfer on 28/04/2022 - 18:44
        +2

        So if you ain't starving and you dare accumulate more than that you are greedy?

        Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy. You should just own your greediness rather than try pretend you're not though.

        By your sh!thouse definition of greedy virtually anyone is greedy, including those long gone.

        • freefall101 on 28/04/2022 - 21:54
          +6

          You seem very focused on not being considered greedy, despite that I gave the dictionary definition right there for you. If you're greedy, go watch Wall Street and feel better about yourself.

          It's on you why you're doing it. But increasing the rent on where someone have to try and live just to maximise the return in order to have more wealth seems a pretty stock standard example of greed. Whether that greed is socially acceptable or not is a totally different question.

        • [Deactivated] on 29/04/2022 - 04:07
          +1

          By your sh!thouse definition of greedy virtually anyone is greedy, including those long gone.

          correct. humans are a greedy species. any other shockers for us?

      • rektrading on 28/04/2022 - 19:00

        such as fear of interest rate rises meaning they could go under on the property, it's not greed.

        Fearing cash rate hikes is irrational.

        The cash rate hasn't moved in years. It won't make an impact in any meaningful way when it does.

      • rektrading on 28/04/2022 - 19:06
        +1

        Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy.

        It's great to wake up in the morning to 60 sec of truth.

        https://youtu.be/6bbzwJ0Sx48

      • burningrage on 28/04/2022 - 20:48

        By that logic, if I work hard and earn more wealth in order to provide meself buffer or safety net, then I must be greedy because there is no "real need".

        As if the word "real need" is defined by other people. Your definition of "real need" is different to other people.

        • freefall101 on 28/04/2022 - 21:54
          +3

          You ignored everything else I wrote and focused on two words to defend your accumulation of wealth.

          Hmmm, interesting takes notes

          It's totally about the individual as to whether they're greedy or not, defend it however you want, it's not like it's illegal or anything.

      • drfuzzy on 01/05/2022 - 01:06
        -1

        Found the commie.

  • Clear on 28/04/2022 - 16:55
    +3

    I normally increase only by about $20-$30 a year for existing tenants renewing. Knowing other places many are having $100+ increases a week and I think that's just greed trying to take advantage of the shortages.

    • chrisn26 on 28/04/2022 - 17:07
      -1

      Not exactly greed to respond to supply and demand.

      This is not like when scalpers buying scarce items like ps5 or gpus and selling it on ebay for ridiculous prices. Let's not forget that the true greed in the property market are the policy makers. Thanks to negative gearing, hardly any affordable housing options, poor city planning (they manage to do covid modelling well which arguably is more complex than city planning). Surely the only explanations to these has to be greed.

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