Society/Culture Landlords - What is the point?

[The Cryptkeeper]

Wife and I are renting a shoebox apartment whilst trying to build a house that is constantly delayed due to supply chain issues. We got an email from the agent yesterday asking for an 18% increase which is disgraceful.

 

[FIGJAM]

Wife and I are renting a shoebox apartment whilst trying to build a house that is constantly delayed due to supply chain issues. We got an email from the agent yesterday asking for an 18% increase which is disgraceful.

Why? Is it 18% over the market?

 

[The Cryptkeeper]

Why? Is it 18% over the market?

Inflation is 7%. It's 2.5 times CPI. They also hiked it 7% last year.

It's shamelsss opportunism and nothing more. Similar local properties are going for a fair bit less but the grubby owner is playing the odds that we don't;

a) want the hassle of moving so will just cop it.
b) have the desire to compete for another property in a tight market.

 

[yodellinhank]

Inflation is 7%. It's 2.5 times CPI. They also hiked it 7% last year.

It's shamelsss opportunism and nothing more. Similar local properties are going for a fair bit less but the grubby owner is playing the odds that we don't;

a) want the hassle of moving so will just cop it.
b) have the desire to compete for another property in a tight market.

Challenging rent increases or high rent

Renters can challenge a rent increase if they think it is too high.

www.consumer.vic.gov.au

You could maybe ask for a rent assessment?

 

[The Cryptkeeper]

Challenging rent increases or high rent

Renters can challenge a rent increase if they think it is too high.

www.consumer.vic.gov.au

You could maybe ask for a rent assessment?

Yeah, done mate but I doubt they'll get involved.

Thanks for the link though.

 

[Frank Grimes]

Unsurprisingly there are a large number of landlords leaving the market. Mostly in Victoria and Queensland.

Though I think it's more to do with financial reasons than pets that the article alludes to (though pets may be a minor consideration).

 

[evolved2]

State governments doing their most sincere effort to push landlords out while accepting record immigration numbers is an interesting dichotomy.

Number still goes up.

 

[DangerousD]

Unsurprisingly there are a large number of landlords leaving the market. Mostly in Victoria and Queensland.

Though I think it's more to do with financial reasons than pets that the article alludes to (though pets may be a minor consideration).

Weird take (video) as a landlord in Victoria, the fact you need to allow pets wouldn’t even come in to consideration when selling, I don’t know anyone who has even brought it up. The only reason I and anyone I’ve spoken to has sold or is selling, is cost, mostly due to rising interest rates.

The so called regulations taking away landlords rights is a scare mongering, yes there lots of regulations and they have been costly but the costs are passed on, are tax deductible and help make sure people are living in suitable accommodation.

The guy in the video says most houses sold by landlords were purchased by owner occupiers, which to me is a good thing.

 

[Frank Grimes]

Weird take (video) as a landlord in Victoria, the fact you need to allow pets wouldn’t even come in to consideration when selling, I don’t know anyone who has even brought it up. The only reason I and anyone I’ve spoken to has sold or is selling, is cost, mostly due to rising interest rates.

The so called regulations taking away landlords rights is a scare mongering, yes there lots of regulations and they have been costly but the costs are passed on, are tax deductible and help make sure people are living in suitable accommodation.

The guy in the video says most houses sold by landlords were purchased by owner occupiers, which to me is a good thing.

The article does go on a weird tangent about pets half way through (though in the data it doesn't specify the amount of properties are unsuitable for pets e.g. apartment buildings). I found the data interesting before the weird tangent though.

I personally would be selling my IP now as well if I wasn't holding it to help my chidren to have a property of their own when they grow up. I don't know what the property market is going to like in 15-20 years.

Apart for helping my children it doesn't make much sense to hold on to the property. At the moment it is producing just 1.8% yield of it's current value (figure does not include loan costs). After all the costs running the property (taking out the loan costs) I only make about 8k a year profit. With the anticipated $1000+ increase to the land tax next year and undoubtedly increase of other costs it's just not worth it and seems a good time to sell.

 

[DangerousD]

The article does go on a weird tangent about pets half way through (though in the data it doesn't specify the amount of properties are unsuitable for pets e.g. apartment buildings). I found the data interesting before the weird tangent though.

I personally would be selling my IP now as well if I wasn't holding it to help my chidren to have a property of their own when they grow up. I don't know what the property market is going to like in 15-20 years.

Apart for helping my children it doesn't make much sense to hold on to the property. At the moment it is producing just 1.8% yield of it's current value (figure does not include loan costs). After all the costs running the property (taking out the loan costs) I only make about 8k a year profit. With the anticipated $1000+ increase to the land tax next year and undoubtedly increase of other costs it's just not worth it and seems a good time to sell.

I have just sold, well the sale goes through this week, I didn’t really want to but I am one of those people who has a few loans about to come off a fixed rate and couldn’t afford to hold.

I’m getting tired of all the property market reporting, we have a housing crisis and everyone is crying out for something to be done, a few things get done and the media change to whining about people having to sell investment properties.

 

[Seeds]

State governments doing their most sincere effort to push landlords out while accepting record immigration numbers is an interesting dichotomy.

Number still goes up.

Why? Landlords leaving the market frees up more homes to be owner occupied. I.e. renters become owners. Isnt that a good outcome?

 

[HirdyLannister]

The article does go on a weird tangent about pets half way through (though in the data it doesn't specify the amount of properties are unsuitable for pets e.g. apartment buildings). I found the data interesting before the weird tangent though.

I personally would be selling my IP now as well if I wasn't holding it to help my chidren to have a property of their own when they grow up. I don't know what the property market is going to like in 15-20 years.

Apart for helping my children it doesn't make much sense to hold on to the property. At the moment it is producing just 1.8% yield of it's current value (figure does not include loan costs). After all the costs running the property (taking out the loan costs) I only make about 8k a year profit. With the anticipated $1000+ increase to the land tax next year and undoubtedly increase of other costs it's just not worth it and seems a good time to sell.

My IP is a small basic 3 and 1, first home I purchased.

It's also a 750sqm north west facing corner block which I hope to convert into three town houses.

Will give one to each kid when the time comes.

 

[nobbyiscool]

A month after my rent was increased by 15%, today I received a notice to vacate so they can sell it empty.

Shitbags. How did we ever let housing become for-profit?

 

[evolved2]

Why? Landlords leaving the market frees up more homes to be owner occupied. I.e. renters become owners. Isnt that a good outcome?

They're not pushing landlords out though. Rent costs and property prices are going up, and projected to keep doing so.

I was hoping for a property market crash that isn't going to happen.

 

[burge13]

A month after my rent was increased by 15%, today I received a notice to vacate so they can sell it empty.

Shitbags. How did we ever let housing become for-profit?

Anything that costs money will be for profit. Nothing comes for free

Are more regulations needed? Certainly. To complain its for profit is completely ridiculous

 

[My_Username]

A month after my rent was increased by 15%, today I received a notice to vacate so they can sell it empty.

Shitbags. How did we ever let housing become for-profit?

It's been 'for profit' for a very long time.

 

[barreness]

Anything that costs money will be for profit. Nothing comes for free

Are more regulations needed? Certainly. To complain its for profit is completely ridiculous

Capitalist realism

 

[Seeds]

A month after my rent was increased by 15%, today I received a notice to vacate so they can sell it empty.

Shitbags. How did we ever let housing become for-profit?

How do you know its for profit? Should people be forced to keep a large amount of their money in an investment against their will? What happens if they need the cash? They can only realistically sell between contracts as a lot of the potential market disapears if it comes with a renter.

 

[Frank Grimes]

The housing crises isn't just an issue in Australia, but for many countries in the world. You can pretty much cut and paste the video for the issues Australia is facing.

 

[greyhound punter]

The problems landlords have is that their 3-4% yield (if they are lucky, and before costs i may add) is considerably less than the 5.5% risk free yield one can get for term deposits (risk free).

 

[The Cryptkeeper]

The problems landlords have is that their 3-4% yield (if they are lucky, and before costs i may add) is considerably less than the 5.5% risk free yield one can get for term deposits (risk free).

That completely overlooks the capital gains when the owner sells.

You should be assessing their returns on yield plus growth less expenses.

Plus they get a nice CGT discount for holding >12 months.

 

[greyhound punter]

That completely overlooks the capital gains when the owner sells.

You should be assessing their returns on yield plus growth less expenses.

Plus they get a nice CGT discount for holding >12 months.

Ok. Then we are now speculating. rather than investing.
In some respects, they are the same, but in others, they are vastly different.

It makes no financial sense to buy an asset that yields less than a risk free security, or in this case, a term deposit account.
We are now in the realm of leveraged markets and speculation.

For example, a house is sold for $425 000. It returns $19 000 a year in rent for a return of 4.5% return before costs. (My previous rental that i was living in, 12 months ago)

For that property to yield the same as a risk free bank account - the price needs to drop to $350 000 to yield 5.4% (before costs).

If interest rates continue to go higher and higher - it is only a matter of time until houses are revalued violently.

 

[The Cryptkeeper]

Ok. Then we are now speculating. rather than investing.
In some respects, they are the same, but in others, they are vastly different.

It makes no financial sense to buy an asset that yields less than a risk free security, or in this case, a term deposit account.
We are now in the realm of leveraged markets and speculation.

For example, a house is sold for $425 000. It returns $19 000 a year in rent for a return of 4.5% return before costs. (My previous rental that i was living in, 12 months ago)

For that property to yield the same as a risk free bank account - the price needs to drop to $350 000 to yield 5.4% (before costs).

If interest rates continue to go higher and higher - it is only a matter of time until houses are revalued violently.

Almost all investment is speculation. But historically property prices go up (in the long term) and any property investor worth their salt factors this into their strategy. That $425k investment is unlikely to stay at $425k ten years up the track. It will almost certainly be worth significantly more than this by the time the owner cashes in.

Interest rates are cyclical, so your argument there plays both ways. Again, any property investor who knows anything factors this in.

 

[Nuggs Bunny]

What am I reading?

Who would buy shares if the dividend is less than a term deposit?

 

[owen87]

It makes no financial sense to buy an asset that yields less than a risk free security, or in this case, a term deposit account.

Much insight. Such wow.