23 November 2011

Are Canberra landlords greedy?

| Property Manager
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money business

Here’s what ACT residential lessors (landlords) understand very well:

Traditionally Canberra’s rental market sees considerable seasonal fluctuation. The transient nature of the population regularly sees high prices and strong competition for vacant properties in the Summer months, particularly around January when everyone is moving in and out of town.

Here’s what ACT residential lessors (landlords) rarely know:

Beyond the initial fixed term (usually 12 months) there is little you can do to control when the tenants vacate. You cannot force existing tenants to sign a lease renewal, and if they choose to remain on a periodic tenancy they can leave at any time by giving 3 weeks notice.

Scared that their tenants might move out when the market is slower, owners often surmise that they should get rid of those tenants to find someone willing to commit to a new 12 month term; and many are shocked when they are told that they have to give the tenants 26 weeks notice if they don’t have a valid reason (eg moving in or selling the property).

“Why?” or “That’s not fair” are the usual owner responses to this. Let me explain why…

The legislation is generally weighted to ensure that the tenants have some protection against owners who make decisions based on the business of owning an investment property, without due consideration for the human factor.

Ironically these are often the same people who believe that the banks are faceless corporations hell-bent on gouging every dollar from mortgagees, yet when they have to make decisions relating to their investment property they treat their tenants worse than the banks could ever get away with.

So this is a gentle reminder to Canberran lessors – your investment property is not just a business, it is someone’s home. If they treat it well, pay their rent and cause you no issues then they certainly deserve to be considered when you are making decisions that will affect their lives.

If you can’t afford to wear a short period of vacancy because the tenants move out during the quiet time of year, or if you can’t afford to lose a few dollars a week in rent to secure tenants outside of the summer-time-wallet-gouge, then you probably can’t afford to own an investment property.

And let’s not forget – any property marketed at the right price will be tenanted fairly promptly in Canberra, regardless of the season. If you’re sitting on a vacant property it’s probably because you are trying to screw tenants out of more money than the place is actually worth.

[Photo used by permission of Stuart Miles]

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Here’s something you don’t see often in Canberra – A week’s free rent.

My landlord is amazing!

Our rent hasn’t risen in 5 years, We have had 1 inspection in 5 years…

She is even now talking about refinancing the house to renovate it… so it stops breaking on us… i love dealing with her, It’s a private rental, We have a great relationship, We are even facebook friends!

Interesting that so many people are experts on the financial positon of these evil landlords. Id like to know where youve got your figures to back up the claims? In my experience, and yes its anectdotal I dont claim to have audited all landlords, most owners of residental rentals are just average wage earners themselves. Theyve worked hard and now are making an effort to secure their financial future by taking control themselves

Of course they hope to make a profit out of it. Why else would they do it? They arent ACT Housing. Often these people are risking there own homes and future income. Those of you decrying incentives for people who own rental properties what do you see as the alternative? If the rental market wasnt seen as an attractive investment for mums and dads who would own rental properties? Without rentals whre would the tenants then live? Or esle it would become the domain of large organisations who would definately not be too concerned about tenants rights.

A lot of posts here seem like sour grapes. A case of envy over someone else having something you havent got. If you think landlords have it so good now why arent you doing it too?Too noble? Or just you arent prepared for the sacrifice and risk youd have to make now for a future gain?

milkman said :

fragge said :

I personally hope the bubble bursts and those that have contributed to this mess are stuck with a bunch of debt that they and their children and their children’s children can never climb out of. At the moment, the opposite is true, but nothing lasts forever.

What a lovely thing to say about children.

Children don’t stay children forever, champ.

Deref said :

ramblingted said :

I wouldn’t think there would be too many investors around anywhere who are thinking about guaranteed capital gain…this morning’s papers are talking about a possible 25% drop in property prices in many countries including Oz in the coming year/s..

People have been saying this for a long time. Like the next San Francisco earthquake, you could take that either to mean that it’s never going to happen or that it’s overdue – I suspect it’s like the shampoo ad – it won’t happen overnight, but it will happen.

I think Canberra and surrounds is already well into it’s correction, and that this will last for a number of years. If infaltion is 3% or thereabouts than 5 years of static prices equals about a 15% drop in real terms. Add to this a 10% average drop in actual price and there’s your 25% correction.

What’s interesting to investors, of course, what happens after that.

ramblingted said :

I wouldn’t think there would be too many investors around anywhere who are thinking about guaranteed capital gain…this morning’s papers are talking about a possible 25% drop in property prices in many countries including Oz in the coming year/s..

People have been saying this for a long time. Like the next San Francisco earthquake, you could take that either to mean that it’s never going to happen or that it’s overdue – I suspect it’s like the shampoo ad – it won’t happen overnight, but it will happen.

Property Manager said :

If we’re talking about the apartments at Parkview then there are two currently listed on allhomes, at $390 and $400.

Yup, mine’s a two bedroom ensuite apartment with two car spaces. Both of those have only one parking space. The apartment is on the second floor (better security and views than ground floor), immediately opposite fire stairs, with the two parking spaces immediately adjacent to the fire stairs in the basement (i.e.: distance from bed to car is about two flights of stairs). The level of natural lighting in this apartment is awesome (it’s facing North) for the moment, right up until the new commercial property goes up in the vacant postage stamp of land between the Parkview and the Magpies Sports Club next door.

Thanks for everyone’s input, I think I’ll leave the rent right where it is since I’d like to reward the steady tenant who has been there for two years with no troubles.

Property Manager said :

… The Greens plans for minimum standards will probably address this, but forcing lessors to spend money on achieving a certain standard will (IMHO) increase the cost of rent for all lower-end properties – not what renters need.

The greens plans for minimum standards are EER2 by 2013, EER3 by 2015, “water efficiency standards can be met by fitting low flow shower heads and taps, and installing a dual flush toilet” and “deadlocks on external doors, along with locks on other external openings” (i.e.: windows). Other standards they are hoping to set include electrical safety, hardwired smoke alarms, ventilation, lighting, laundry and cooking facilities.

These are not particularly onerous, and don’t significantly impact the ability of slum-landlords to offer residences for rent with rotting carpet and collapsing ceilings. I don’t believe for one minute that offering tenants a house with rotting carpets or a non-functional kitchen is actually saving anyone any money (except the landlord, perhaps). Requiring rental properties to have functional kitchens and laundries will simply remove the shitboxes from the market, leaving only fair dinkum landlords interested in providing liveable residences for renters. I don’t plan on fitting my rentals with home automation or cable TV, but neither do I expect my tenants to cook on an open fire in the back yard due to a broken kitchen.

From the Greens media release on the issue which can be easily found by asking Bing about ACT Greens rental standards: You can follow this initiative on facebook at http://www.facebook.com/FairGoRentals.

wycx said :

I wouldn’t think there would be too many investors around anywhere who are thinking about guaranteed capital gain…this morning’s papers are talking about a possible 25% drop in property prices in many countries including Oz in the coming year/s..

I guess they will curse the papers for not warning them that before they made their investment/dice throw. And then they will run to Jooolia asking for a bail out.

Many (most) landlords have enough headroom and contingency that a soft or even dropping market for a few years won’t hurt much in the overall plan of several decades.

What will be more interesting is to see what happens to rents. My guess is they’ll level off a bit, but then increase again in the inner areas.

I wouldn’t think there would be too many investors around anywhere who are thinking about guaranteed capital gain…this morning’s papers are talking about a possible 25% drop in property prices in many countries including Oz in the coming year/s..

I guess they will curse the papers for not warning them that before they made their investment/dice throw. And then they will run to Jooolia asking for a bail out.

Violet68 said :

Tell that to the families I have been seeing on a daily basis who are constantly declined private rental due to their low incomes, or the families who go without food and other necessities just to pay their poor Landlord over 75% of their income in rent.

Except the poor landlord isn’t getting it…if the Government wanted to reduce rents for long income families they could introduce a land tax rebate concession for landlords renting to these sorts of families…but I wouldn’t hold your breath..

wycx said :

So this is a gentle reminder to Canberran lessors – your investment property is not just a business

Well, if the property is negatively geared it is not a business at all, it is a speculative investment. If it wasn’t for the free ride it is getting on the back of all Australian tax payers it is unlikely the lessor would have even be in the game.

Negatively geared properties lose money every week by definition. Why would the lessor care about further small losses incurred by an low season tenant vacation with all those capital gains on the horizon…

I wouldn’t think there would be too many investors around anywhere who are thinking about guaranteed capital gain…this morning’s papers are talking about a possible 25% drop in property prices in many countries including Oz in the coming year/s..

So this is a gentle reminder to Canberran lessors – your investment property is not just a business

Well, if the property is negatively geared it is not a business at all, it is a speculative investment. If it wasn’t for the free ride it is getting on the back of all Australian tax payers it is unlikely the lessor would have even be in the game.

Negatively geared properties lose money every week by definition. Why would the lessor care about further small losses incurred by an low season tenant vacation with all those capital gains on the horizon…

Tell that to the families I have been seeing on a daily basis who are constantly declined private rental due to their low incomes, or the families who go without food and other necessities just to pay their poor Landlord over 75% of their income in rent.

OpenYourMind10:21 am 26 Nov 11

ramblingted, it’s nice to see some sense in this discussion. If you read Violet68’s post, you’d think all these landlords are evil rich bastards, when in fact many are simply average everyday people who have worked hard, saved and are trying to set up some kind of income security into their retirement. What Violet68 doesn’t realise is that if you tried introducing further ‘security of tenure’ etc., there would be even fewer people considering renting out properties and the rental market would be even tighter than it already is.
Canberra’s average income is the highest in the country. Naturally Real Estate purchase prices and rental costs are going to be high because any renter is competing with many others on high incomes. Western Australia has the same problem whenever a resource boom is in full swing.

Are Canberra landlords greedy…well, not nearly so much as the ACT Government!

I’ve recently done the sums when looking at renting out the place we own. Say its worth $800k. We could get around $600-650/wk when rented. Minus weekly outgoings of rates and land tax ($220) property manager’s fee and disbursement charges ($60), Insurance ($12), water/sewerage supply ($12), provisioning for repairs ($40), and a monthly visit from a gardener to try and ensure things stay alive ($23)..leaves you with between $233-$283 before tax. (Not including the one-off inventory, advertising and letting fees etc which the property manager charges). Not to mention that some of these costs are incurred whether the property is tenanted or not.

On the other hand, if we sold it and put the cash in a fixed term deposit we’d get around $861/wk. And if you are over 60 you could wack the whole lot in an allocated pension and pay no tax on it all. And no worries about tenants and their secret goats!

I’m actually amazed that there are so many properties available for rent in Canberra. Particularly those properties on which people are still paying off a mortage.

What a lovely thing to say about children.

Speaking of children. Fk the market and enforce appropriate living standards (safety, functionality and appearance) together with security of tenure. “children in homeless families are the largest group who seek support from the homeless service system”.

We don’t need more “affordable” housing. We need to stop people getting rich out of making housing “unaffordable”.

http://www.homelessnessaustralia.org.au/UserFiles/File/Fact%20sheets/Fact%20Sheets%202011-12/Homelessness%20&%20Child%202011-12.pdf

http://www.homelessnessaustralia.org.au/UserFiles/File/Fact%20sheets/Fact%20Sheets%202011-12/Homelessness%20&%20Families%202011-12.pdf

fragge said :

I personally hope the bubble bursts and those that have contributed to this mess are stuck with a bunch of debt that they and their children and their children’s children can never climb out of. At the moment, the opposite is true, but nothing lasts forever.

What a lovely thing to say about children.

When I did Economics, we certainly spent a lot of time on markets and supply and demand. There was also some discussion about things called ‘subsidies’, ‘tariffs’ and ‘government intervention’.

However in Australia over the last decade we have developed a rather unique species of people who say they are believers in “markets” and the right to get rich. These people are hypocrites, however, because what they are really advocating is Government Soviet style command of housing prices to keep pushing them higher. I think in years to come the last decade of government control of the market will be cited as an example of how to destroy an economy. We’ll have a free market when there is no:

First Home Vendor Grants
Negative Gearing
Capital Gains Tax Exemptions
Welfare rights for property millionaires
Artificial choking of land releases
Stamp duty as a percentage of property value (and reliance of stamp duty for govt revenue)

If you think about it, it is utterly ridiculous that 400 square metres of land with no infrastructure or amenities costs upwards of $300k in a small city like Canberra in the midst of boundless sheep paddocks in our very low population density country. There is nothing comparable to this obscenity anywhere in the world – it is clearly the result of deliberate government policy to keep prices as high as possible (and consequentially to transfer wealth from younger generations to older). It’s no secret – at the last election those clowns in the ALP were blatantly touting their high house price policy in their Canberra campaign ads.

For an example of how a real housing market behaves, look to Texas and Georgia.

Holden Caulfield4:24 pm 25 Nov 11

fragge said :

Correct, however when people are also forced to pay such exorbitant prices in order to continue living in the same geographical area, there isn’t really a market so much as a monopoly. Its not like there are people listing their houses for under $300k to undercut the competition.. I personally hope the bubble bursts and those that have contributed to this mess are stuck with a bunch of debt that they and their children and their children’s children can never climb out of. At the moment, the opposite is true, but nothing lasts forever.

Close your eyes and I’ll kiss you,
Tomorrow I’ll miss you;
Remember I’ll always be true.
And then while I’m away,
I’ll write home ev’ry day,
And I’ll send all my loving to you.

OpenYourMind said :

Bluey said :

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

There’s this thing called the market. People charge what the market is willing to pay. I suggest you could take a course called Introductory Economics 101.

Correct, however when people are also forced to pay such exorbitant prices in order to continue living in the same geographical area, there isn’t really a market so much as a monopoly. Its not like there are people listing their houses for under $300k to undercut the competition.. I personally hope the bubble bursts and those that have contributed to this mess are stuck with a bunch of debt that they and their children and their children’s children can never climb out of. At the moment, the opposite is true, but nothing lasts forever.

Appreciate the reply PM. I’ve passed that on to my Mum so she knows the score in future.

Property Manager12:01 pm 24 Nov 11

Bluey said :

OpenYourMind said :

Bluey said :

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

Landlords charge what the market is willing to pay. I suggest taking the course ‘Introductory Economics 101’

I’d suggest you go and look whats out there. Real World 101.

A question for PM.

My mother recently had to vacate as her owners are moving back in. Fair enough. Whilst looking around for a new place she found some truly horrendous places with mould in the carpets and walls, sagging ceilings, leaking showers, burnt out stovetops etc. Apparently these are all OK to rent as the agent isnt part of some industry self regulating group? Is this legal to rent place obviously unsafe for habitation, (mould and saggy ceilings) and is there a body these properties and/or ‘agents’ can be reported to?

There’s a simple requirement in the Standard Residential Tenancy Terms (part of the tenancy act) that requires a landlord to provide a property in a state that is fit for habitation. This possibly leads to some conjecture about what suffices, but the descriptions you’ve given sound like clear breaches.

The issue here is (and I’d be happy if any other professionals could add to or correct this assessment), while I think the tribunal would probably like to hear the matter and would like to take action against the owner, there are two clear obstructions to justice:

* Until a tenant takes possession of the property the owners have not breached anything.
* Even if the tribunal could find a way to do something about it before a tenant was signed, not a lot of people have the spare time to take the issue to the tribunal, particularly when there is a chance it won’t achieve anything.

Other than the tribunal there really isn’t anyone to police this stuff. The Greens plans for minimum standards will probably address this, but forcing lessors to spend money on achieving a certain standard will (IMHO) increase the cost of rent for all lower-end properties – not what renters need.

Unfortunately the agents liability in this is largely diminished as they only act on behalf of the owner and therefore have no control over the state of the property.I do think that the agent should probably have their heads read for managing a shitbox, and they could face a slap on the wrist for it, but that’s their business decision. I would be distancing myself from that client as much as possible because headaches are sure to follow.

OpenYourMind said :

Bluey said :

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

Landlords charge what the market is willing to pay. I suggest taking the course ‘Introductory Economics 101’

I’d suggest you go and look whats out there. Real World 101.

A question for PM.

My mother recently had to vacate as her owners are moving back in. Fair enough. Whilst looking around for a new place she found some truly horrendous places with mould in the carpets and walls, sagging ceilings, leaking showers, burnt out stovetops etc. Apparently these are all OK to rent as the agent isnt part of some industry self regulating group? Is this legal to rent place obviously unsafe for habitation, (mould and saggy ceilings) and is there a body these properties and/or ‘agents’ can be reported to?

Property Manager said :

rescuedg said :

hear hear, I just tried to make that very point to my landlord. We have had 2 rent increases in 18 months at about 3% each on a property that was already pretty darn expensive for what it is. Will not be renewing the lease in January and will wait out the 26 weeks while we find somewhere else to live.

Two increases within 18 months? In the ACT?
Not only is the lessor greedy, but stupid too. They’ve breached the tenancy legislation and you could quite easily get the tribunal to order that the owner owes you money.

It’s not that simple, though. Even if you’re guaranteed a win at the tribunal, if you intend to keep renting in the ACT then it might not be worth going – several real estate agents ask if you have ever been to the tribunal on their property applications. It’s not hard to imagine that if you say “yes”, your application will find its way to the bottom of the pile, regardless of whether you won or not.

Property Manager9:28 am 24 Nov 11

matt31221 said :

I think not only land lords but real estate agents. They are oxygen thieving middle men who are greedy scum that don’t keep their word and have pushed house prices up. You could put more trust in the word of a junkie/thief than a real estate agent.

About ten years ago house prices were affordable in Canberra. It was in the average citizens reach to buy a house here. 85,000 for a 3 bedroom house in Isabella Plains in 2001 – fair price. Now 350,000 for the same house! Surely the value hasn’t gone up that much – (The value of the aussie dollar hasn’t) it is still the same house. 750,000 for a 4 bedroom house in Uriara, tell them they are dreaming. All ’cause of real estate agents.

Wow. I cannot find words to accurately describe how dumb your comments are. Please refer to OpenYourMind’s post RE economics 101 at #20 or #21.

Property Manager9:21 am 24 Nov 11

thehutch said :

Property Manager said :

Rental increases are not capped by value, only frequency. You can up the rent by any amount once every twelve months, but if your increase exceeds “CPI + 20%” and the tenant contests it you will have to justify yourself to the tribunal.

I’m glad you clarified this PM, as some people on here have the false impression that rents cannot be increased above CPI… which is wrong.

On a side note, I always enjoy reading PM’s little write-ups. They entertain me – not only as they are informative, but as they are a testament to PM’s continued development in the property sector.

Plus whenever you write something, I have the fun of trying to guess what was the catalyst for the write up… I guess that a lessor has given you a call recently wanting to remove tenants that choose to stay on periodic tenancy rather than sign a new 12mth lease?

Keep it up PM… sadly real estate is filled with ‘greedy, fake and souless baaaaad people’, don’t become one.

As always Hutch, spot on. The owner isn’t necessarily ‘greedy’ but misinformed and fixated on avoiding tenants vacating mid-year. Much re-education is needed of owners AND tenants.

Yes whingers, property managers too.

I’ve been a landlord for many years now, and there will always be both tenants and landlords who just don’t get it. Renting a property is a simple arrangement. The landlord rents the property, and maintains it, the tenant pays the rent and looks after the place. It really doesn’t need to be more complex.

Of course, you’ll always get both landlords and tenants who want more, and this is typically where things get rocky. My policy has always been to get people in a market rent, give them a small increase every year or two, and fix things when they break. Other than that, leave them alone. By and large my tenents seem to like this arrangement, and typically stay for long periods. On the odd occasion I’ve had a dodgy tenant, I simply tell the property manager to remove them. I don’t care if it takes a while – I have insurance to cover any shortfall or damage they do.

Property Manager9:10 am 24 Nov 11

Grail said :

Nicely put, PropertyManager.

Here’s a question for you and the greater RiotACT community: my property manager has recommended raising the rent on my Holt apartment from $380/week to $400/week. To me that seems a rather large rental increase (that extra $1040pa has to come from somewhere).

Should I try to contact the tenant myself to ask about his/her satisfaction with the property and the current property manager? Is $400/week pushing the limits of sensibility for a 2 bedroom apartment in Holt?

If we’re talking about the apartments at Parkview then there are two currently listed on allhomes, at $390 and $400. I generally suggest to my lessors a price that will keep in touch with the market price, while being low enough to keep the tenants in place – if the price is increased to the point where the tenant can do better for the money, they might leave. That will cost the lessor much more in letting costs and advertising.

Is $400 too much? Probably not, but of course, as Spinact said at #26, the price may also be based on the quality of the tenant – those that cost you a lot by reporting every insignificant maintenance matter probably need to pay more than the tenant who knows how to manage minor things themselves.

EvanJames said :

00davist said :

and distroyed the gardens with 3 secret goats!

I do fervently hope that, when you enter those tenants on that new register of horrible tenants, you put in the “reason” bit: Secret Goats.

Secret Goats: best thing I have read today.

Grail said :

Nicely put, PropertyManager.

Here’s a question for you and the greater RiotACT community: my property manager has recommended raising the rent on my Holt apartment from $380/week to $400/week. To me that seems a rather large rental increase (that extra $1040pa has to come from somewhere).

Should I try to contact the tenant myself to ask about his/her satisfaction with the property and the current property manager? Is $400/week pushing the limits of sensibility for a 2 bedroom apartment in Holt?

I would ask your property manager whether they’re good tenants or not. If they’re good tenants and you don’t need the extra money to cover your expenses then tell your property manager to leave the rent as is.

Nicely put, PropertyManager.

Here’s a question for you and the greater RiotACT community: my property manager has recommended raising the rent on my Holt apartment from $380/week to $400/week. To me that seems a rather large rental increase (that extra $1040pa has to come from somewhere).

Should I try to contact the tenant myself to ask about his/her satisfaction with the property and the current property manager? Is $400/week pushing the limits of sensibility for a 2 bedroom apartment in Holt?

Property Manager said :

Rental increases are not capped by value, only frequency. You can up the rent by any amount once every twelve months, but if your increase exceeds “CPI + 20%” and the tenant contests it you will have to justify yourself to the tribunal.

I’m glad you clarified this PM, as some people on here have the false impression that rents cannot be increased above CPI… which is wrong.

On a side note, I always enjoy reading PM’s little write-ups. They entertain me – not only as they are informative, but as they are a testament to PM’s continued development in the property sector.

Plus whenever you write something, I have the fun of trying to guess what was the catalyst for the write up… I guess that a lessor has given you a call recently wanting to remove tenants that choose to stay on periodic tenancy rather than sign a new 12mth lease?

Keep it up PM… sadly real estate is filled with ‘greedy, fake and souless baaaaad people’, don’t become one.

00davist said :

and distroyed the gardens with 3 secret goats!

Three goats? Sounds like trolling to me. Was there a bridge involved?

EvanJames said :

00davist said :

and distroyed the gardens with 3 secret goats!

I do fervently hope that, when you enter those tenants on that new register of horrible tenants, you put in the “reason” bit: Secret Goats.

You’d have to wonder what the property manager was doing, missing three goats! There are few creatures less secret than a goat. Shameless is a better adjective.

I can understand how it was missed, they only arrived after the inspection, which gave the goats a clean 6 months, pleanty of time.

We were eventually tipped off by neighbors (it’s our old house, they still keep in touch) about them, but the property manager had no reasont to be out that way outside of inspection time, it’s not like canberra where a property manager migth have 3 houses on the same street, this is a big old place on a dirt trach out the back end of Mittagong.

I don’t know what Mum put on the register, but I’ll ask, becase now that you mention it, damn, that would be awsome!

OpenYourMind5:23 pm 23 Nov 11

Bluey said :

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

Landlords charge what the market is willing to pay. I suggest taking the course ‘Introductory Economics 101’

OpenYourMind5:18 pm 23 Nov 11

Bluey said :

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

There’s this thing called the market. People charge what the market is willing to pay. I suggest you could take a course called Introductory Economics 101.

I think not only land lords but real estate agents. They are oxygen thieving middle men who are greedy scum that don’t keep their word and have pushed house prices up. You could put more trust in the word of a junkie/thief than a real estate agent.

About ten years ago house prices were affordable in Canberra. It was in the average citizens reach to buy a house here. 85,000 for a 3 bedroom house in Isabella Plains in 2001 – fair price. Now 350,000 for the same house! Surely the value hasn’t gone up that much – (The value of the aussie dollar hasn’t) it is still the same house. 750,000 for a 4 bedroom house in Uriara, tell them they are dreaming. All ’cause of real estate agents.

Holden Caulfield4:17 pm 23 Nov 11

devils_advocate said :

DHA used to be a great deal when you could build the house yourself (bearing in mind their specifications) and then lease it to them, provided it met their requirements. I’ve had an 11 year relationship with them (recently renewed for further 9 years) and I can’t fault them at all.

As I understand the current system, they only build houses themselves, then sell them to investors with the leases attached, at exorbitant prices (with less than 5 pc yeild, in some cases). No amount of lease/rental security is worth paying such an inflated asset price up front.

Your first scenario is how we dealt with DHA. We had to make some minor upgrades (more security screens, a covered patio etc) and were then good to go.

00davist said :

and distroyed the gardens with 3 secret goats!

I do fervently hope that, when you enter those tenants on that new register of horrible tenants, you put in the “reason” bit: Secret Goats.

You’d have to wonder what the property manager was doing, missing three goats! There are few creatures less secret than a goat. Shameless is a better adjective.

Well said, Property Manager. And a point worth making. I’m amazed by the selfish greed the average person is capable of when they see it as being in their interests.

I used to live in a small resort town that profited from a seasonal recreational activity, and was quiet the rest of the year. As the season started up, you could see the townsfolk turn into sharp-toothed gimlet-eyed greed-machines, looking for every way to extract a buck, and they were even doing it to each other. It was like a feeding frenzy, and no one escaped. When the season was done, they turned back into normal people again.

Truly bizarre.

Property Manager3:38 pm 23 Nov 11

Rental increases are not capped by value, only frequency. You can up the rent by any amount once every twelve months, but if your increase exceeds “CPI + 20%” and the tenant contests it you will have to justify yourself to the tribunal.

devils_advocate3:24 pm 23 Nov 11

Holden Caulfield said :

Property Manager said :

Holden Caulfield said :

When can we expect to read “Are Canberra tenants selfish?” that presents an equally one-sided view of the rental market, this time in favour of landords?

I can do that too. I’m not as biased as this one post might have you believe, this is just part of the picture – I could’ve suggested as much in the OP, but I didn’t want to dilute the message to those lessors that need a good slap around the chops…

Fair enough.

I did learn something though. I was always under the impression that once off the initial rental contract that it was essentially a month to month contract and either party could terminate with a month’s notice.

That’s how it was always explained to me when I was a tenant 10 years ago, so perhaps things have changed in that time.

I had a very brief time as landlord through, using a real estate agent as property manager. That ended relatively abruptly after the tenant paid his bond/first period of rent, moved in and made no other financial contributions for the next 2-3 months. We had a standard no pets rule, but may have considered if asked. We weren’t asked and the only significant contribution made to our property by that tenant was allowing his dog to chew through the brand new blinds and piss all over the new lawn we had carefully laid.

After that we signed up with DHA and then they’re a bit like a bank, in that you sign a lengthy contract agreeing to each party’s terms only to, pretty much, have a cover all at the end that says they can do what they like. A bit facetious of me there, obviously, and they were very good for the 5 or so years we kept the property. Just a bit one-sided when they wanted to break the lease 10 months early.

DHA used to be a great deal when you could build the house yourself (bearing in mind their specifications) and then lease it to them, provided it met their requirements. I’ve had an 11 year relationship with them (recently renewed for further 9 years) and I can’t fault them at all.

As I understand the current system, they only build houses themselves, then sell them to investors with the leases attached, at exorbitant prices (with less than 5 pc yeild, in some cases). No amount of lease/rental security is worth paying such an inflated asset price up front.

Holden Caulfield2:49 pm 23 Nov 11

Property Manager said :

Holden Caulfield said :

When can we expect to read “Are Canberra tenants selfish?” that presents an equally one-sided view of the rental market, this time in favour of landords?

I can do that too. I’m not as biased as this one post might have you believe, this is just part of the picture – I could’ve suggested as much in the OP, but I didn’t want to dilute the message to those lessors that need a good slap around the chops…

Fair enough.

I did learn something though. I was always under the impression that once off the initial rental contract that it was essentially a month to month contract and either party could terminate with a month’s notice.

That’s how it was always explained to me when I was a tenant 10 years ago, so perhaps things have changed in that time.

I had a very brief time as landlord through, using a real estate agent as property manager. That ended relatively abruptly after the tenant paid his bond/first period of rent, moved in and made no other financial contributions for the next 2-3 months. We had a standard no pets rule, but may have considered if asked. We weren’t asked and the only significant contribution made to our property by that tenant was allowing his dog to chew through the brand new blinds and piss all over the new lawn we had carefully laid.

After that we signed up with DHA and then they’re a bit like a bank, in that you sign a lengthy contract agreeing to each party’s terms only to, pretty much, have a cover all at the end that says they can do what they like. A bit facetious of me there, obviously, and they were very good for the 5 or so years we kept the property. Just a bit one-sided when they wanted to break the lease 10 months early.

Property Manager2:38 pm 23 Nov 11

GBT said :

Property Manager said :

rescuedg said :

hear hear, I just tried to make that very point to my landlord. We have had 2 rent increases in 18 months at about 3% each on a property that was already pretty darn expensive for what it is. Will not be renewing the lease in January and will wait out the 26 weeks while we find somewhere else to live.

Two increases within 18 months? In the ACT?
Not only is the lessor greedy, but stupid too. They’ve breached the tenancy legislation and you could quite easily get the tribunal to order that the owner owes you money.

NSW is a different story though.

I thought landlords were able to increase the rent once every 12 months? In that case, there would be no problem with an 18 month period that contained two rent increases.

I suppose it depends if it was an 18 month period after the initial 12 month lease. I took it to mean that the entire lease was 18 months, but you’re point is right, it is possible that the increases were valid.

Property Manager2:36 pm 23 Nov 11

Holden Caulfield said :

When can we expect to read “Are Canberra tenants selfish?” that presents an equally one-sided view of the rental market, this time in favour of landords?

I can do that too. I’m not as biased as this one post might have you believe, this is just part of the picture – I could’ve suggested as much in the OP, but I didn’t want to dilute the message to those lessors that need a good slap around the chops. Which is not all of them, but like most things, a few rotten apples are stinking up the place.

I’ll start working on the next installment soon, and may even use your title.

devils_advocate2:35 pm 23 Nov 11

Some of the things in the act are a bit stupid really because they end up distorting people’s incentives.

For example, rental increases are capped, but of course it doesn’t regulate what you charge on a new lease. So if you have a tenant in place and the market increases more than CPI or the maximum amount or whatever, the only way the landlord can meet the market is getting that tenant out and having a fresh agreement with a new tenant. In my view this is worse than the incumbent tenant at least having the option to pay the higher price.

And this 26 weeks notice thing is stupid and one-sided. I mean who can really forecast 26 weeks in advance what is going to happen? Anyone wanting any kind of certainty at all would need to start negoiting next year’s lease halfway through the current lease, otherwise issue a notice to the tenant so that they can’t leave you in the lurch in July on 3 weeks notice.

And in order to get around the 26 week notice period you either have to bring yourself into one of the fairly ridiculous hardship exemptions OR you have to issue notices in respect of trivial breaches by the tenant that you wouldn’t otherwise have worried about at all, just so you’re not stuck with having to give 26 months notice.

It sounds cynical but these measures are put in place to try and protect tenants but it just makes the problems worse and backs landlords into a corner.

Holden Caulfield said :

When can we expect to read “Are Canberra tenants selfish?” that presents an equally one-sided view of the rental market, this time in favour of landords?

It’s a good point, as a tennant, i have experienced good and bad landlords, however, being handy with a toolkit, I have often helped my parents fix up their rental between tennants, they have been generally lucky, but the last lot broke almost everything (including light sockets) smoked in the house so much you can see were pictures hung, and distroyed the gardens with 3 secret goats!

Both landlords and tennants can be good and bad, and to my experience, neither party more so than the other.

Property Manager said :

rescuedg said :

hear hear, I just tried to make that very point to my landlord. We have had 2 rent increases in 18 months at about 3% each on a property that was already pretty darn expensive for what it is. Will not be renewing the lease in January and will wait out the 26 weeks while we find somewhere else to live.

Two increases within 18 months? In the ACT?
Not only is the lessor greedy, but stupid too. They’ve breached the tenancy legislation and you could quite easily get the tribunal to order that the owner owes you money.

NSW is a different story though.

I thought landlords were able to increase the rent once every 12 months? In that case, there would be no problem with an 18 month period that contained two rent increases.

colourful sydney racing identity said :

I think the real question is ‘are property managers leeches?’

Some yes and some no, the place i am in the process of leaving has in recent months become a nightmare, with some pretty severe lease breaches by the landlords, however, the property manager has been nothing less than amazing throght this, and has helped us immensly.

However, when I was renting in canberra, I never had a property manager that good, some were fine, sure, but no one stands out as particuarly helpfull.

I have heard repeatedly that one particular property manager is very good, and my fincee who rented once through him hightly reccomends him, but i personally dont have any experience with him.

We are moving back to the ACT now (well, we have, just need to finish getting our stuff along with us) but it’s a private rental, in this case, having seen whats out there at the moment, i would say I’m getting a fairly good deal.

Holden Caulfield2:23 pm 23 Nov 11

When can we expect to read “Are Canberra tenants selfish?” that presents an equally one-sided view of the rental market, this time in favour of landords?

colourful sydney racing identity2:20 pm 23 Nov 11

I think the real question is ‘are property managers leeches?’

In answer to the question:

Yes.

So many absolute s**tbox houses going for astronomical prices its obscene.

Property Manager1:28 pm 23 Nov 11

rescuedg said :

hear hear, I just tried to make that very point to my landlord. We have had 2 rent increases in 18 months at about 3% each on a property that was already pretty darn expensive for what it is. Will not be renewing the lease in January and will wait out the 26 weeks while we find somewhere else to live.

Two increases within 18 months? In the ACT?
Not only is the lessor greedy, but stupid too. They’ve breached the tenancy legislation and you could quite easily get the tribunal to order that the owner owes you money.

NSW is a different story though.

I was concerned by the relative disorganisation (lack of standard forms relating to breaches, inspections etc) in the ACT rental market after moving down from QLD last year. Reading this particular bit of information on the Tenants Union websites a couple weeks ago made me realise it’s not all bad down here, and breathe a bit easier as I head towards the end of my overpriced lease and start looking at my other options.

They still have the right to put the rent up once you go periodic though, but only in line with CPI.

Still, it would be nice if they had a somewhat adequately staffed government rental monitoring and advisory service like the RTA though.

hear hear, I just tried to make that very point to my landlord. We have had 2 rent increases in 18 months at about 3% each on a property that was already pretty darn expensive for what it is. Will not be renewing the lease in January and will wait out the 26 weeks while we find somewhere else to live.

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