Rental auctions to begin - UPDATED

Caf – yes they can. each time to roll onto a new month you are essentially signing onto a new contract each time.

In regards to this post, seeing as I have a few joints floating about, currently being rented by undesirables displaced from the fires, I say bring it on.

Does anyone know – if you go onto a month-to-month lease, can the agent raise the rent every month if they want to?

I believe rental increases are capped, something like 10% per year?

If surety of income was so important then why did my landlord raise my rent by $10 knowing that by doing so I wasnt going to sign another 12 month lease? Because they raised the rent i decided to go on to a periodic lease, if they didnt raise my rent I would have signed on for another 12 months.

The simple answer is that agents know the market is so tight that they can replace tenants at a moments notice. It also means they can raise the rent by pretty much whatever they like every year and the poor tenant will be forced to pay it.

Vic makes a good point – it’s an approach I use too. Surety of rental income is worth a lot, more than $10 a week, especially if the tenants do the right thing (and plenty don’t).

Ultimately, the property market is cyclic, for both renters and owners. In time, the rental market will ease a bit (but not for several years, I suspect). Renters be aware: things will get worse for you before they get better.

Vic has a good point. A long term tenant paying less rent although looking after the place is a better option.

As for jacking up the price by $10 – you may get an extra $520 in the year but what if that costs you 1 or 2 weeks with the place empty to get it.

Vic, you are a gentelman.

I’ve given this some thought, based upn the arguments above. never even considered this before!

I’m against an auction system for rental properties, and will never use it for mine – and I have 7 of them in the Canberra region!

Yes, my properties are my eventual retirement nest eggs, but I appreciate at the same time that they are home to families, who want security.

In my investment strategy at least, the highest bidder is not necessarily the one who occupy one of my preoperties. I’ll gladly take on someone who will take care of my houses and treat it as their own. That is better than an extra $10 per week, or whetever it will be.

Blackshaw was the one who originally pioneered wholesale auctioning of properties, rather than it being a tactic. He’s about making money money money. Interestingly, quite a few big-name real estate agents in town once worked for him, including the chap who did the biggest deal the other week.

Very rotten time to be a renter. I wish people trying to milk bucks from other people would get out of the property market.

If an official auction takes place, are the participants liable to pay various fees/duties etc to our disgustingly avaricious town rulers, over and above the normal imposts of a rental lease?

At one time the Tenants Act had an anti discimination clause against mums. Brought in during the war years. I wonder if Beb could force this through leglislation that auctioning of rents beyond what is advertised in the paper is discrimination and clap a $100k fine on the autioner and landlord.

Fifteen years ago some friends and I were actually denied a property in Turner because we offered to pay more than the asking price – the agent was indignant, telling us that it was so out of line to offer more that the asking price that they would no longer consider us as prospective tenants … I’ve always thought that the agent was duding his client but that could be just me. My how things have changed.

This sort of thing is nothing new. Blackshaws are just trying to add a patina of legitimacy to a fairly reprehensible activity.

The last rental place my partner and I lived in was given to us because we offered $10 a week over the advertised price. The extra money wasn’t solicited by the estate agent, we just wanted the place.

However, since then, I’ve heard of estate agents basically saying “This is the advertised price, but you’d better pay more, or you won’t get the house” in as many words.

By making the “auction” system formalised it just gives estate agents even more power to make tennants sit up and beg. Especially given the state of the rental market.

I participated in one of Peter Blackshaw’s tender processes when bidding for a house.

It’s basically an auction without the transarency of knowing what else has been bid.

I was unsuccessful (but was assured that my bid was second and would I like to offer $40,000 more … blah, blah, blah).

I walked away vowing never to deal with Blackshaw ever again.

Being kept in the dark while an agent attempted to manipulate me with lies generated enormous stress.

I believe transparency in such real estate transactions is great, but I don’t trust Blackshaw to deliver it.

In the ACT, it takes nearly 20 weeks rent just to pay the rates, taxes and utilities. The rent is just over half the repayments. I must provide on-going tenants 6 mths notice to leave. Land values are stagnant in Canberra, so there’s no improvement in equity. Many other investors are selling their ACT properties and buying in QLD and WA. I don’t think that Peter Blackshaw’s rental auctions are unethical; they are trying to keep what few investors are left in the ACT market.

Joker: Nice idea in theory, but if you have to find yourself a rental place in a hurry (like if you have moved to Canberra and dont know anyone) then you have very little option but to pay whatever it will take to get you into a place.

As a renter in Sydney and now in Canberra I have witnessed this practice happening unofficially for some time. When applying for a rental property these days you have to complete a form which asks you what you are willing to pay for the property. Most people nominate a little bit less than the asking rate.

However, there is nothing stopping someone nominating a slightly higher rate, and thus more likely to get the lease.

This will happen more and more while the rental vacancy rate is at such low levels (about 1.9% i think in ACT).

At least this way renters will know why they failed to get a lease and how much the going rate is.

The ACT govt really needs to increase the level of affordable housing, increasing vacancy rates to around 5%, which should lead to slightly less competition and lower rents.

It wont happen though because all the MPs probably have a plethora of investment properties themselves and it will hurt their own personal interests.

Realestate agents have sunk to a new low. It’s the same as the ‘Buyer Ranged’ rubbish when they sell houses, i just need to know one thing, what’s the PRICE?!

Advice to potential buyers and renters, Don’t play games and refuse to be made a fool of, walk away.

What happens if the “reserve” is not met? The lessees could use this system to their advantage, too.

if i owned property, i wouldn’t let them do this to my properties.

great, now Ill have to blame anyone living in a house or similar property for driving up rental prices, in addition to the wealthy, blood-sucking landlords, vile and despicable investors, I hearby label all renters as overbidding moral-less scum. Unless youre that guy living under a tarp near csiro, I DESPISE you!

I don’t think its wholly unethical but the amount of people who will be put off purely because they can’t bothered will be pretty big I suspect.

I don’t see anything unethical about it – it is after all in a public scenario that denies any underhanded tactics. Investment properties are after all an asset used to generate money and as such if the market conditions are such that this becomes feasible then good luck to the proeprty owners. Granted it sucks big time for renters.

It will be interesting to see not only what sort of properties they put up for “auction” but the type of bidding that eventuates. After all this is new and many people just may not be comfortable bidding.

Mind you, never underestimate a real estates ‘creativity’ when it comes to generating business.

Blackshaw will need to careful what they put up first as a poor result could turn property investors and other real estates away from this methodology.

As a landlord I would generally support anything that increases my rental yeild, BUT I think this is out of line because it uses people’s emotional reactions in a situation they may not be familiar with to increase the price. Bonfire is right – it is another market tool. But it’s a tool that heavily favours the experienced, and potentially disadvantages those who are inexperienced. Just my $0.02.

i think its interesting and will keenly observe.

is it ethical ? i dont see how it isnt.

the market already dictates the price paid.

this is just another market tool.

i think thumper is right though, it might not be a good option if the successful bidder cant meet the price they bid.

i’d like to see the cost breakdown as well. i have met few property managers of residential propertys who actually earned their money.

i suspect the auction slug may not cover the extra rental income.

Congratulations go to Peter Blackshaw for finding a new way to be an *even lower* form of scumbag.

Hooray for rich property inverstors!

Auctioning of rental properties is probably a bit unfair. It may not be so good for many landlords either, as people are likely to get emotional and overcommit then not be able to make the rental payments later, leading to action that costs both landlord and renter.