Hi,
So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then. I am not on a current lease. Is that fair or normal? Also is it true the landlord can only evict with 90 days notice? But I can leave with 21 days notice.
This is Sydney.
Is this rent increase justified or normal?
Ta.
Maybe $20 per week would attract the landlord, but $40 won't save him any money going by your example.
I mean it might be break even for his landlord if there is tenant right after move out. But there is a chance that his landlord will have to wait a few days or a week, also if he is a good tenant so far, it is a net positive for landlord.
I am also a landlord and this is what i offered my tenants after giving them the market price of the property.
New rent on par with market rate then. I am not on a current lease. Is that fair or normal?
Yes it's fair if its on par with market rate.
Also is it true the landlord can only evict with 90 days notice? But I can leave with 21 days notice.
Should be based on your contract.
Is this rent increase justified?
Yes. LL are not running a charity and RBA keeps increasing rates. What do you suggest? Also what were your thoughts when rents were dirt cheap during covid days with not much people moving in and out.
Look up NSW tenant guidebook to give you an idea whether the timeline is within well guidelines.
Reference $170 per week or 25% as you’ve calculated based on your current rent, I’d say go on to renting websites like realestate.com to get an idea of current ‘advertised’ rental market in your area over past 3 months.
25% rise imo is not cheap but isn’t unreasonable (provided the method of communication & justification for rent rise by your landlord) is within guidelines and is provided to you clearly.
I think the last point is important as how did your landlord/agent communicate this rent increase and why
I wonder who got a 25% pay rise this year?
Wage growth is funny in that it doesn’t ever match the growth of expenses and inflation for the average breadwinner.
Get another job! says the capitalist who works one job
Cut your household expenses! says the capitalist who wines and dines at the best restaurants and live in a mansion
Stop being so lazy! says the capitalist who plays golf on weekdays
Ahhhhh the life
I got a 2.5% 😥
I got close at 23%!
Am i playing Bioshock or reading Ozbargain forums 🤔
It’s purely supply and demand….Does anyone really think that if interest rates peak and then start decreasing that landlords will decrease rent then ?
Of course not lol.
Landlords are the parasites of society. They will try to squeeze blood from a stone if they could.
Just like the hotel that charges more for a weekend. Supply and demand.
Maybe you should buy a house to help out a renter, rent it under what it costs you. Don't be a parasite though.
It's called an Investment Property not Charity Property for a reason
Yes there has been plenty of examples where rent reduction is required. After the GFC and 2011 floods in Brisbane, most rents had to be decreased for landlords to fill them up
In Sydney between 2003 to 2009 plenty of areas had high vacancy rates and rents reduced significantly especially out in Western Sydney
Most landlords who have owned properties in regional areas/cities have had to reduce rents in order to occupy them as well
But ofcourse, lets ignore the facts and continue with the landlord bashing!
I myself have raised rents on all my rentals in line with market rent. Anything less than market rent is unfair to me. Anything more than market rent is unfair for the tenant.
Simple.
Well put. This is what I did as well.
Completely fair.
You will have to move (or threaten the move) just like the way it happened in Covid.
What happened to rentals during COVID?
Most were discounted 30% or more to attract tenants.
Supply v Demand, Econ101
The difference now, perhaps, being that COVID presented the chance of an economic catastrophe. Rapid responses to major events will cause major shifts. Now, though, presuming there's no other crisis (maybe a big call), the people who own capital can to at least some degree control what people are willing to pay by market-wide price manipulation. Those making capital aren't easily persuaded to part with it. Demand may drop, but in all likelihood the cost of housing won't drop relatively with it. The market's shown it can afford to pay these rates. Unless there's a sudden increase in the amount of housing, and benevolent new landlords, those who rent homes out will squeeze as much out of their tenants as they can. In normal situations the average Joe Schmoe loses out, because it's a choice between paying through the nose for a rental or having no rental at all.
Unfortunately, for too many Australians the latter is already the reality.
Roland, everything you banged out there is simply supply and demand.
Average joes lose out everywhere, average joes in Australia need to live in the burbs. Further and further out as prices go up.
Average joes in Africa go hungry
Average joes in PNG sleep on the floor of houses with 10 other family members
Average joes in HK sleep in 1 bedroom with half their family.
We've got it easy.
I don’t think they teach Econ101 at LLU (Landlord University).
Oh you have read "Socialism and French post-structuralism to make you sound smart and witty for the ladies" Target sale version too?!
As a landlord when the property starts costing more than it brings in I notice and up the rent.
Increasing interest rates makes all landlords take note and up at the same time, causing a spiral.
If it was supply and demand, yes - rents would go up. But nowhere near as fast or aggressively as they currently are with added interest rate pressure.
When I book a hotel on a long weekend I pay more. Supply vs demand.
Government saying one rent increase per year, I guess you need to make sure it's enough to cover anything unexpected.
Vote with your money. Depending on the location and your past rent it could be justified. If you think it's unjustified and not comparable then the only option, I am afraid, is start looking elsewhere. Don't sign a fixed term lease and move out when you find something within your budget. Landlords don't enjoy vacant properties (assuming what they asked for is unjustified it will be difficult to rent it out again). Imagine losing ~$500 per week because they got greedy.
Dont care, I write it off.
I know its more of a pain in the ass to move all your crap and relocate. I'll make the next tenants pay what I want.
is it fair? yes
is it normal? yes
Are you a landlord?
yes
New rent on par with market rate then
I would say that's your answer. if he's raising it to be in line with other rentals in the area, that seems completely reasonable to me
Mine went up $200 a week (33% increase) and if you're not within a lease then the 60 days is legal. Perfectly annoying, but legal
Pay the increase or move into a cheaper rental.
Time to buy land, and stop making someone else rich.
Why stop at land? Buy oxygen.
Or nitrogen for your soil…
We need to stop letting foreign investors buying homes .
Houses are for Aussies to live in .
One each .
When greed rules the poor are the modern slaves for the grist .
Alot of AUSSIES own more than 1 property, what are you talking about?
Do you want to LIMIT Australian Citizens from owning MORE than 1 PROPERTY?
Even our politicans all own MORE than 1 Property each LoL
Learn to read.
Thanks Dad, you added much value.
And most of our politicians are greedy scumbags too, who needs more than 2 houses. "But these are my investment properties!!" where a disadvantaged mother of 3 working two jobs can pay off the mortgage for the owner while LL contributes nothing to society. Land and basic housing shouldn't even be treated as a commodity
Hi Beach Bum
I like your solution. But can you tell me who gets to decide if someone gets their one house in Point Piper or in Mount Druitt?
So my landlord has increased rent by $170 per week or 25% with 2 months notice. New rent on par with market rate then.
Sounds like you've been lucky paying below market rate for a while. You should be thankful for that.
If the new rent is market rate, you might not find anything cheaper without making some sort of other sacrifice in the process. Even if you find slightly cheaper rent elsewhere, you may have moving costs, which you should factor into your decision.
Sydney has recorded a new low in rental listings, with the number of new listings falling 17% month-on-month in April on realestate.com.au – the lowest it has been in a decade.
PropTrack director economic research and report author Cameron Kusher said the results reflected a deepening of the rental crisis across the country:
I think in Sydney and Melbourne, there’s potentially more that it could drop. Just because we know that migration to Australia is really strong and we know that most migrants tend to settle in Sydney and Melbourne.
I think it’s going to continue to be a problem and the main reason for that is supply takes time. There’s a lot of stock under construction, but most of it has been sold to owner occupiers rather than investors. So that doesn’t really help the rental market.
Those damn owner occupiers. We need more landlords for the incoming 650k migrants!
Many years ago I experienced the same thing in inner city Sydney. A warehouse conversation 1 bedder went up in price all of a sudden from $300 to $450 a week. I really looked after the place so my landlord was sad that I was leaving, but I basically told the REA that they were dreaming to get that price.
So I left and the first inspection as had 20 people looking through and was rented by the end of the day. Guess I was wrong.
Got some good news for OP to feel better.
I found out yesterday that a family friend was hit with a 63.64% increase a few months back as her rent went from $550 a week for a 2 bedder up to $900 a week. She wanted to stay in the area for her and her partner's work so they are now stuck in this place and actively looking to buy an apartment nearby for $600k. Yes, it's actually the same or cheaper to buy your own property instead of renting right now. The biggest issue is saving for that big deposit.
Where can I buy a property worth $600k that’s producing $900/week rental income?
It doesn’t sound like the norm. And certainly not what’s happening in my area.
It’s definitely not cheaper to own. Not once you factor in all costs, such as maintenance, council rates, water rates, strata, insurance and mortgage repayments.
actively looking to buy an apartment nearby for $600k
You missed my point. She has to sacrifice to make ends meet by looking in a neighbouring suburb. The difference in a 2 bedder is around $200k. For $900 a week she can't afford to buy in the suburb that she is currently renting but with the same $900 she could buy from a suburb that's only 1 minute's drive away.
I get it.
You’re comparing apples & oranges.
You’re comparing a property worth $600k, that won’t generate $900/week rental income.
If that’s the case, why not move into a cheaper rental the next suburb over?
@Extreme: Not comparing apples to orange at all. Just comparing apples (better quality) in another stall further away when the apples are too expensive at the current stall.
Why not move over to a cheaper rental the next suburb? What makes you think that the next suburb won't follow with the price increase in another year or 2? It's now about $700 and soon it will be $750, $800, $850 and $900.
@DarkOz: Oh come off it.
You’re not making sense.
Are you suggesting a property worth $600k is better quality than a property receiving $900/week rental income?
It just doesn’t make sense. I’ve got several properties, 2 of which are around $600k in value and neither of them bring in anywhere near $900/week.
A property renting for $900/week isn’t at all likely to be comparable to a property worth $600k.
@Extreme: You have no idea about locations locations. What is worth more the worst house in the best area or the best house in the worst area?
@DarkOz: What is worth more from a property value perspective or a rental value perspective?
They aren’t the same thing.
But you aren’t buying a property that returns $900/week rental income for $600k. It just isn’t happening.
A property earning $900/week rental income is usually going to valued somewhere around the $900k mark & up. Again depending on location.
I don’t know of the location you’re referring to, because you’re being deliberately vague.
@Extreme: Of course they are the same thing. I know because I have friends actually going through this ordeal.
2 different family friends actually. Another friend's rent for a 3 bedroom house went from $700 to $900 in the same area as the one I mentioned. You can tell me that I am making it up because rent for a 2 bedder unit costs the same as a 3 bedroom house? Well, I can't explain to you why but those are the facts. The second friend can't afford to rent or buy in this suburb so they are looking in neighbouring areas as well.
@DarkOz: They really aren’t the same thing tho. And you’re ignoring the facts.
A 30 year old 3 bedroom house on a 1000sqm block is going to rent for less than a brand new house on a 450sqm block, even tho the older house is worth more.
Why is the government allowing property investors to rip everyone off with outrageous rent increases, because they gambled and bought property. Yes investing is gambling. Same as stock market except there is no tenant there to rip off. If you are a property investor then you should wear the interest rate increases, or get out. Try getting your money back on the pokies if you lose. I have just received a notice of a 25% increase for my rent which I can't afford. To all the property investors out there, I may end up on the streets but I suspect you do not care.
Lol.
You’re looking at it from such a narrow viewpoint.
If property investment becomes no longer viable and there’s no property investors, then where would you live?
Governments can’t afford to house everyone under social housing. Not everyone can afford to buy.
Sure, it’s not the tenants fault that interest rates are increasing. Just like it’s not the landlords.
Your rent has increased 25% due to the demand for rental properties, not interest rates. There’s a number of factors which is pushing up demand for rentals.
I'd live in a house that would be much cheaper to buy without investors.
When did I mention anything about social housing
Maybe no fault of either but the landlords gamble and lose. The tenant should not have to pay.
Demand is there because of high house prices forcing people to rent instead.
All his could be fixed by the government if they had a brain.
There’s no way in the world you fix it without creating further problems.
Considering 70% of homes are owner occupied, how do you fix it, without impacting on that 70%?
No government is fixing the housing issues, without having an impact on the votes they receive.
Could you afford to buy a house at pre covid prices? If not, then you need to rent.
What the F has that got to do with what I said.
Care? Nope we don't. When we (landlords) had to decrease our rents nobody cared either.
The rent increases isn't the landlord trying to match rate rises
It's because for every house available for rent there are dozens of good applicants keen. So we choose the very best and those who pay the best rent as well.
Nothing more than Supply and Demand
Rent for our 2 bed unit in Brisbane was $605/wk (now $690). The unit below us with same plan is advertised for $900/wk we’re getting the hell outta dodge.
I am in a similar situation right now but not sure how long it will last because our lease agreement is expiring soon.
As I mentioned previously, the 2 bedders in our building went from $450 to $550 recently and forced 2 tenants to move out with both units snapped up within 1 day of inspection. Only this week another unit in the same building is being advertised at $650! If our rent goes up by $100-$200 we will have to cop it for at least 2 years to stay within the high school catchment area. Extra $5k-$10k per year just for rent would hurt.
Have your children commenced? Once they start school you can move.
Thanks for the info and we are aware of the rules. A few years ago we had a family friend moved into this area only to get her son into this particular HS. They moved out a year afterwards and kept him in this same HS. Unfortunately for us our younger son is 2 years away from enrolling and he really wants to go to the same HS with his older brother.
Unfortunately, it’s just the way the market is at the moment.
If the property isn’t worth $650/week, it’ll remain vacant.
Rents were fairly flat/stagnant for a number of years pre covid, and in some cases went down during covid.
With property prices exploding, it means the entry costs for an investor are much higher. Higher costs = lower yields.
You’ve then got to look at the changing dynamics in which how people live which has occurred over the pandemic. Such as number of occupants per household reducing.
Then take into account, the expected immigration and the lack of new supply as building costs have skyrocketed, builders going bust increasing risk for home buyers(wether it be owner occ/investment) and the fact that building approvals are declining.
It’s not going to get better anytime soon.
There were many people laughing and saying how they’d benefit from property prices declining and interest rates rising.
The reality is, the situation was always going to be dire. Those that have money would benefit the most, where as those without would suffer the most.
The cost of getting a new tenant depends on what’s written into the property management agreement. And it varies from agent to agent, from property to property.
1 of mine is 1 weeks rent + GST and a $30 lease fee.
Another is all inclusive into my weekly management fee.