No. I'm not a landlord, landlord hater or a tenant.
https://www.abc.net.au/news/2024-07-25/should-heating-and-co…
Heating and Cooling Be Mandatory for Rentals? This May Cost Landlords Money
CurlCurl on 26/07/2024 - 00:31
Comments
@try2bhelpful: If my tenant said they want a 5 or 10 year lease with CPI increases, I'd be happy with that.
I think there are too many cowboys already with government subsidised solar panels & split systems.
In particular with split systems, I should be able to choose my own retailer and installer, submit the evidence it's been installed correctly and then be able to claim any rebates. But in the real world the gross cost is higher to install a cheap Chinese brand split system from the approved installers.
@JimB: We didn’t go with the providers with rebates either for our reverse cycle air con. The trouble is the Government is damned if they do or damned if they don’t, which is what killed insulation. Open slather leads to more cowboys.
@try2bhelpful: People renting were always free to pay more to rent a place that has such things. Now they'll be paying more for these things whether they want them or not.
@try2bhelpful: I grew up in a house that didn't have air-conditioning and also went to a school that didn't have it. In the 90s it was rare, yet we survived. People didn't need it then, why do they need it now?
@JIMB0: I didn’t have air conditioning either but it did have heating. However, the house was pretty bad in Summer and we did have a Clark pool in the backyard.
@JIMB0: It's getting hotter in summer.
In winter it's proven that there are health benefits to living in a warmer house. It's more efficient to use a split system than portables, and this is only possible to be done by the landlord. Also, as a capital expense it can be depreciated over its expected life by the landlord. It also increases resale value.
So, we get potentially less pressure on healthcare, increased living standards, lower running costs and electricity usage over portable heating/cooling options, minor increases in costs to the landlord over time, and increased realestate value.
It's long term wins all round.
@JIMB0: they don't, the government and trade unions are making it seems like Australians have made a decision to screw the environment and demand builders come out and do major works to the properties. they're making us look like crying babies needing more comfort but like you most of us don't even have this in our own "owned' homes.
Its all geared towards making money for trades. If it was about Australias and our needs, they'd be investing into sustainable solutions and focusing on improving structural efficiencies and being reasonable on how to apply it, e.g. start with new homes and focus on building approvals for renovations. They'd also look at a rating system to help renters identify better efficiency homes to give them choice.
@JIMB0: Na, it was the social and economic norm to not charge rent on caves then.
People didn't need investment rental income then, why do they need it now?
need is a strong word.
With sub-zero Winters and 40°C + Summers… yes, people absolutely do need well insulated places with heating and cooling.
Actually it might make those places cheaper. Because they can't legitimately be rented out, they have to be rented out illegitimately, often at a big discount.
Use to be far more of the population lived on 1/4 acre blocks surrounded by trees and grass, often with high ceilings and large verandas shading the house.
Now ~20+ million people are crammed into cave-like townhouses, apartments, and barren townhouse-eque "house" estates with nothing but concrete for km's around.
Air-con is way more necessary these days for most people.Life used to be much simpler and less stressful. Now things move at such a fast pace.
I need a hot tub spa to relax, but I don't want to pay for it. Can we get the government to include these as well? I don't want to pay extra for it.
2026 legislation change.
@paulojr: Probably only affect a few owners, everyone else will have sold up and moved their investments elsewhere - getting a rental then will be a real gladiatorial game.
@shutuptakemymoney101: Yep, all the landlords will send a bulldozer through their investments and the tenants will have nowhere to live…
I agree, standard utility is a farce. I hope you paid for your NBN fibre upgrade yourself instead of taking the subsidy, and reimbursed the power company for the electrical maintenance on your street - we all gotta do our bit.
lol @ thinking this will cost landlords anything… they will cry like it cost them money and how they are the poorest class of humans, but the truth is, it will barely make a blip in their finances and if anything, they will just shoulder the burden onto renters and the tax payers.
It’s time we started burning landlords for heating… in fire pits, along with their heat bricks they gave us to use with our “free gas”.
@pegaxs, the government is meant to provide social housing, how's that working out for you?
Landlords are doing all the heavy lifting, keep imposing more costs on them and they will simply wave goodbye and move their investments elsewhere making the rental pool even smaller.
i don't think schools are teaching about investing fundamentals. They think landlords are all billionaires like Elon Musk. no clue the person sitting next to them at work doing exactly the same job earning exactly the same pay is probably a landlord.
Imo, I think school will make very little change in how young people spend money. I would think the environment has a bigger affect ie. how parents and friends value money. Plenty of young people smoke, despite years and billions of dollars spent on education re smoking.
Landlords are doing all the heavy lifting
Dismissive hand gesture
Landlords will simply wave goodbye and move their investments
It's funny that you don't realise this is a good thing.
Dismissive hand gesture and laughter @ Typical16-bitEnjoyer
Everyone is complaining about a lack of rental availability, and you think making the rental pool even smaller is a good thing. lol
You must have a lot of faith in the government to provide all the social housing that will be required, you must know a lot of tradies too to help build them.
@shutuptakemymoney101: Social housing isn't the answer. I'd argue it's the average income families doing the "heavy lifting" when they are completely priced out of owning a home thanks to landlords overwhelmingly influencing the market.
Funny how the tables have turned from just a few years ago - you'd think a pandemic would exit landlords from this investment scheme rather than outrageously potentially having to….install a heater.
@Typical16-bitEnjoyer: Social housing isn't the answer - sure, tell that to someone living in their car.
@shutuptakemymoney101: Social housing is absolutely beneficial for those on the poverty line. Still not the answer.
Considering a lot of investment properties are negative geared, the costs of installing heating and cooling if it currently doesn’t exist is marginal compared to all the other costs - loan repayments, rates, insurance, land tax, utilities etc.
The % of investment properties not having heating and cooling would be very small.
You make it sound like negative gearing is free money.
The opposite. I was implying the costs associated with negative gearing makes a split system purchase marginal
I wouldn't say $5-8,000 (typical costs for 3 head multi-split) is marginal.
Split systems are depreciated over a 10 year period.
@JimB: Only need to install one split system in main living room. Most landlords will buy the cheapest one
@JimB: that would be closer to a per-split cost so multiple that by the number of rooms. Multi-split isn't much cheaper and I recommend against it as if they fail they are much harder to service. Also 10 years you won't get out of a high efficiency system.
Investment cost on a larger rental.. probably closer to $20k then need to factor in a failure rate as an ongoing risk and cost.
The other thing we've found is warranty can't be trusted for rentals with the new legislation.
Twice now since the new legislation came in we have failure with appliances under warranty and were forced to buy and install a new appliances to avoid the tenant acting on the emergency repair option. note that cost is not just the appliance, but the tradesman to install and remove whilst the tenant is at the property. This stuff is now part of the minimum standards so you can't wait for a warranty call out without risking some serious headaches. Australian manufacturers and retailers haven't simply changed how slow they handle warranty as a result of the last set of mandatory tenancy changes.
If you've installed these systems before you'll know repair times are usually 1 month plus on a AC unit. even high end ones like daikin can be many months. Hitachi last repair we did was 14 weeks, often its due to parts not being in Australia.
In a rental.. cannot wait, so you'll have to replace it likely the model you got won't exist anymore and you'll then need to do some minor renovation to fit a different unit. This ongoing cost increase is another reason structural changes to make the homes higher star rating is far more intelligent than mandating electrical systems be added to the home.
How is it not? If you can balance your taxes correctly then you can have a lot of these add on such as A/C or repairs partially paid for.
That doesn’t even include the extra money coming in from the likely rent increase when the landlord can now say: includes new A/C freshly painted, renovated kitchen and bathroom etc etc
Seems like free money to me.
Exactly. I installed two new a/c units, cost me $3,200. Total expenses on the property for the FY year was $15,602, total income on the property was $30,152.
They're basically paying for it anyway. I didn't miss the extra $3k but I bet the two kids who were in those two rooms definitely appreciated the cool last summer and the heat tonight when it's forecast to get down to 2 degrees.
This is already a minimum standard in Vic (and some other states I believe). I think it's totally fair in this age for A/C and heating to be mandated, especially with the poor insulation in builds.
Where does the cost get allocated? Well it's a once off write off for anyone negatively gearing - but with a median rental of $550 per week, rents in Victoria are going up much much more based on other market factors.
The cost of installing a single cheap split system is almost insignificant in real terms (compared to rent), especially when the rebates come into play.
It's not a once off write off.
Split systems are depreciated over a 10 year period.
Ah good call
If the cost is insignificant, why can't renters fund it? Most landlords would be ok with AC being installed by a professional at the renters cost.
To be clear what you're quoting…
insignificant in real terms (compared to rent)
Of course a landlord would be happy to get a free upgrade to their property - doesn't make it fair though
Why is it not fair that if someone wants something extra, they should contribute to the cost. If the landlord doesn't have their own AC would it be fair to ask the renter to pay for it?
Also the landlord would be responsible for any future breakdowns once it is installed so it adds potential future costs.@Mike88: If you think the price of the rent should be based on the amenities offered, do you think the price should stay the same if no amenities are added? because that's not how rental pricing works at all, prices are high due to demand caused by government immigration policy (population growth). Do landlords really want to complain about the government policies when that's the only reason they're above water right now with higher interest rates?
Most of the problems actually come from lack of passive stuff like insulation, draft proofing, blinds and also checking for air gaps. If landlords care a little they'd do those first.
Reverse cycle air conditioners are actually quite effective if you put all the above in.
But then most people just pay the most they can afford for a property and leaving them with no money for improvements. So basically they've capitalised everything into the price of the property.
Tenants also need to look at what they are renting. Like an apartment surrounded by other apartments would be warmer than side of the buildings. Just like town houses would be better than units.
There is a podcast on ABC and an architectural professor from Germany living in Australia was talking about why it is so bad here. Interesting listen.
"Most of the problems actually come from lack of passive stuff like insulation, draft proofing, blinds and also checking for air gaps. If landlords care a little they'd do those first."
Homes built earlier than the 70s didn't have wall insulation.
People who own and live in these homes can't afford to insulate it themselves so I no wonder landlords aren't going to pay to for proper insulation.
But I do think ceiling insulation should be mandatory.
You're correct, Given the cost of properties and the cost to retain the properties, most landlords can't afford to improve their properties.
Homes built earlier than the 70s didn't have wall insulation
This really depends. In the UK a lot of houses are solid plaster over brick to get the smooth finish and for insulation to happen they put wall insulation over (create like a frame then plasterboard and it is like $10k to do a house (about 130m2 floor space 2 stories).
It is possible just like having secondary glazing (you can do it yourself with some Perspex and timber) as a student I blutac opaque paint drop sheets over the windows to avoid heat loss and it did wonders.
Unfortunately everything costs so much more in Australia when it comes to trades.
The costs to install double glazed windows in Australia is 2-3 times the costs in the UK.
DIY secondary glazing is great if you can DIY. I heard you can use bubble wrap directly on glass.
how do you put roof insulation into a flat ceiling? Should 100 year old homes have their priceless ornate plaster ripped out to add insulation? Its tricky right.
The answer isn't always obvious.
Personally I'd be happy to put an extra blanket on to live in a beautiful federation style home unmodified I'd even do away with all automation, but if it was a boring modern home I would want the landlord to rip down the plaster and add the extra insulation. This again comes back to understanding the need for choice and realities of the homes for rent.
Plus.. when our government gets involved in ceiling insulation people usually die.
https://www.abc.net.au/news/2014-09-01/home-insulation-royal…
Lots of asbestos ridden post-war homes around that are very drafty, have zero insulation and difficult/expensive to retrofit anything due to the construction type.
Yes, landlords could install insulation, better doors, windows and reverse cycle AC, but at what cost? Guaranteed it will affect the tenant's rent at the end of the day. Building standards in Australia regarding insulation and passive heating/cooling are pretty poor and what they are is a MINIMUM standard. Getting a builder to do anything other than the bare minimum or anything outside the 'norm' instantly results in costs exponentially increasing.
I'd say leave it as is. Let """the market""" dictate it. If tenants can't afford to live in a newly built, well insulated house with ducted AC or reverse cycle AC in every habitable space, then find a property that doesn't have those amenities. Prices will reflect it accordingly.
Lots of asbestos ridden post-war homes
Long as you don't disturb the asbestos you are fine.
As said. Retrofit secondary glazing. You can also do wall insulation with by creating a small layer above existing walls (that is how they do it in the UK).
You got to give it to people who invest in asbestos time bombs and spent all their money.
Minimum standards at 5 / 6 star is a lot better than post war homes which are 2 star at best.
Why would you ask builders to do insulation? They are project managers. Most of them started out as carpenters. You really need to know who you are asking to do what.
I did a whole refit of a terrace house in London (UK not Ontario) and it cost me less than $40k. Did the boiler (hot water / heating), all the radiators, new bathroom, new kitchen, replastered the whole place (note they do hard plaster not plasterboard), ripped out pre / post war cupboards. Yeah I found old newspaper lining draws from when it was shillings. Not one builder came onsite. You just got to know who you are contracting to do which job.
What about old houses that are slated for development and will be demolished shortly. There's plenty of people who are happy to rent these for a bargain price due to the trade offs.
Cheap source of trouble if they report you to the government.
Government doesn't like exceptions.
In Vic, you need to get an electrical and gas safety certificate when renting the house (and every 2 years thereafter).
If it's old and slated for demolition, it's more hassle than it's worth to rent it out.
If you have an written agreement with the tenants, the tenants who would agree to live in old house to be demolished may also be difficult to evict.
@outlander: Not to mitigate the landlord's responsibility but surely the tenants would know it is an utter shithole before moving in.
87 Kellett Street, Northcote has since sold $1,265,000
There are a few things that should be regulated by the government, and imho this is one of them. Given build quality of modern places makes them about as thermally stable as a tent, aircon is a basic necessity.
Wear a jumper. Buy a fan from Bunnings. Problem solved renters so entitled.
Eliminate negative gearing. Increase taxes on 3+ held residential investment properties. Problem solved, Landlords so entitled.
Why should successful people be punished? Tall poppy syndrome is killing this country
Having a negatively geared property is hardly evidence of success.
Front door and running water Be Mandatory for Rentals? This May Cost Landlords Money
there is a new doctor who episode call dot and bubble, watch it. its basically the generation of people driving the new laws.
Nope, give them a front door and running water they will soon be whining for a security alarm system and a lifeguard as well - it's a slippery slope when everyone feels so entitled these days. lol
My grandparents grew up without running water. Tenants these days are so entitled. /s
It won't cost landlords money (at least not in the long term), it will cost renters money
Yeah maybe, split systems aren't very expensive to install and lots of (possibly most) rentals already have them.
Does this apply to places with a very even climate throughout the year that doesn't usually require heating or cooling? Where insulation alone would be sufficient?
Of course it does, when has the government ever been able to make judgments based on conditions
Poor renters cannot afford the electricity to cool/heat their place of residence anyway. Electricity is now a luxury good thanks to the affluent virtue-signalling eco-fundamentalists who are waging class warfare on 'Struggle Street'. 30 years ago, when everything was coal generated and it's generation and grid wasn't outsourced, electricity was cheap.
This is our reality though today and not clear it will get better any time soon.
Even a high efficiency whole of house AC can consumer around 10kw per hour, leave it on 24 hours a day that is about $96 a day on our tariff. They also aren't great in low temp, they tend to freeze over and go into defrost cycle.
Government now has a war on solar, charging customers to feed into the grid is the latest proposal so free energy is getting harder to achieve.
Gas which is cheap is now banned for new homes. With all our natural reserves in Victoria and its BANNED for new homes!
https://www.abc.net.au/news/2023-07-29/victoria-government-g…Yes it's ridiculous we are exporting all our gas and not letting our own people use it
The costs of installing them will be negatively geared and the tax payers will be paying for it by way of lost taxes going into other areas
Just like every other investment property cost
Lol at all the armchair economists claiming landlords are doing sophisticated calculations on their value proposition. They charge what they believe they can get. Some might charge less if it makes them feel warm inside.
The landlord’s costs are only dictating the baseline. If they can’t recoup their costs, the leave the market.
Thats great. The market can be a bit crowded and suffocating. There are plenty of better investment opportunities.
I doubt it. Corporate landlords will enter the market at a much faster rate than individual landlords can leave.
There's a market for places without AC. When I moved out of home, I got a cheaper place because it was cold in winter + hot in summer. If they'd been forced to put an AC in, they'd have been able to rent it out to a less risky tenant at a higher price.
Exactly I don't use AC even in my own home. Winter = more clothes, Summer = turn on the fan. No ac needed.
What's next? Mass central heating in every building like in the US? Even if you ignore the environmental concerns of wasting so much energy, have the choice of not having a higher bill is much preferred rather be forced into something you don't need.
Looks like portable split systems won’t be making a comeback anytime soon.
https://www.rwta.com.au/rwtanews/ban-on-high-gwp-small-ac-eq…
So save the planet or renters freeze to death pick any one. Seems weird to me $150 drinks fridges are ok, but if people want to stay warm using pretty much the same tech the environment takes precedence.
Not much to do with the environment I imagine. More about refrigerant patents running out, so they want to push people onto the next thing they can charge 1000x the price for.
more like solar power and batteries and EV chargers for renters, renters have been requiring heating and cooling since 1849
I don't see why heating and cooling should be a requirement. It's really not essential. My school didn't have air conditioning, and neither did my childhood home. If I want it, I'll rent a house with it or pay my landlord to install one. But it shouldn't be a requirement.
Air conditioners are complicated beasts with fragile fins and pressurised hoses containing refrigerant. They have service requirements and a limited lifespan. This all costs money which will be passed on to the tenant and/or taxpayer (via deductions).
For the record I'm a tenant and I rent a place with an air conditioner. But I choose not to use it because it's cheaper to put on a jumper in winter and turn on the fan in summer.
It's already mandatory in VIC and has been for quite some time. Rental availability has driven the increases more than anything.
No. I'm not a landlord, landlord hater or a tenant.
Homeless?
Home owner
It'll cost the tax payer money. We landlords don't give a shit.
The government coffers must be feeling the crater being left by negative gearing this tax return.
Basically every existing rental must be reporting a loss.
More likely only the ones purchased within the last few years. A small portion of rentals are negatively geared meanwhile rent income has increased for all properties. Overall the government would be earning a lot more in tax revenue.
State governments might be hurting as the turnover of properties slows down, expect the next new regulation to be an annual land tax replacing stamp duty.
$27 billion apparently doing a quick Google. Up 62% from 2020
I guess the price increases offset the lower number of transactions at the moment.
VIC has already moved to an annual land tax for commercial property
https://www.rsm.global/australia/insights/tax-insights/stamp…
@jaimex2: Possibly, but I expect most landlords aren't that sophisticated that they are predicting future policy.
More likely they just aren't making ends meet as interest rates have risen, Melbourne has lower rental yields than any other capital. Dogbox apartments that don't have capital gain aren't worth holding.
Canberra already has an annual land tax, and the rental yields are significantly higher. However I'm not sure higher taxes could be passed on in full in Melbourne, landlords will have to eat a portion since the average tenant doesn't earn as much.
Nevertheless the soon to be most populous city in the country isn't going to be a bad investment in the long term, anyone selling land now will regret it. Apartments are a different story
@greatlamp: Victoria has about three decades of covid debts to pay off and it's pretty obvious who they think they can squeeze for it.
I certainly wouldn't invest there when there are so many better options.
Climate change is not being kind to Victoria in general - its either flooded or on fire depending on season.
Population growth is not a positive. A crowded indebted city with a hilariously ill planned rail network that's probably going to be canned is definitely not where people with money will stay.
Victoria has about three decades of covid debts to pay off and it's pretty obvious who they think they can squeeze for it.
Sure, if you think property price increases will not offset these new taxes and costs then it is a bad investment. I think they are insignificant compared to the gains in land prices.
Climate change is not being kind to Victoria in general - its either flooded or on fire depending on season.
Rubbish, QLD has far far bigger problems coming from climate change, Brisbane is literally a flood zone, most of the population in QLD lives in cyclone risk areas. These have far more significant costs than pine plantations in VIC catching fire. Have you ever heard anyone worrying about it?
Population growth is not a positive. A crowded indebted city with a hilariously ill planned rail network that's probably going to be canned is definitely not where people with money will stay.
These sound like talking points informed by talkback radio and liberal party whinging.
Population growth is good for land prices and good for rent. That's what is important to an investor isn't it?
If the rail network is completed this will increase prices further around those hubs, otherwise it won't. It's all positives and no negatives. Like I said before, people are welcome to invest in other states, their loss.
People renting can’t put these in for themselves in Australia. It is different overseas where there can be long term rental agreements and a deal is made with the landlord. There are government rebates for owners to put in energy efficient systems like hot water systems, solar panels etc. They tried with insulation, which would be a great idea, but installation cowboys created dangerous situations so it was dropped. It is a great pity this happened because it is a great passive way to provide a more regulated temperature in the dwelling.