Whats all this talk about a tight rental market?

[Brendan]

Here is an interesting view on the current state of the rental market in Australia.



LANDLORDS citing a shortage of rental properties as a reason to hike rents might not have a leg to stand on, an independent researcher says.
Statistics from the Real Estate Institute of Australia put vacancy rates as low as 0.5 per cent in Darwin, 1 per cent in Sydney, and 1.6 per cent in Melbourne.


Check out the link here - http://www.news.com.au/business/money/story/0,25479,24076249-14327,00.html

So those of you that are landlords and have IPs, what do you think?

[HMcIntyre]

Well I don't own property in Australia, but when I moved here my fiancee and I had to find a new place to stay (we needed more space). I know a number of the inspections we went to had 50+ people, and in one case the agent had to take us in in two groups as there were too many people to go through the house once.

[The Y-man]

As a landlord, we've been jacking up the rents, and so far have had no issues.... the rental market is still very tight.

Cheers,

The Y-man

[Slade]

Interesting, on that same site on the same page as that article was this..

Rents heading up as housing sales tumble | NEWS.com.au (http://www.news.com.au/business/money/story/0,25479,24031735-5013951,00.html)

It just goes to show you the media can write anything they like based on any figures they like.

[JamesGG]

As a landlord, we've been jacking up the rents, and so far have had no issues.... the rental market is still very tight.



Hiya,

As a landlord, I'm seeing much the same thing. Happy days.

As a tenant, believe me, I'm having a *lot* of fun trying to find somewhere to live right now :rolleyes:

Granted, we're being rather picky about what we want. But damned if I'll settle for less than I'm happy with. Dollars are easily found when they need to be.

Cheers

James.

[Brendan]

James,

What is the reasoning you don't live in a property you own and rent whilst you have an IP?

I have heard of quite a few people renting while owning an IP of recent.. would be interested to know why you made that decision?

[HWT]

I'd be mad to rent instead of own. My PPoR costs me $50 a week plus $500 a year in rates. I have an IP too and some land we'd like to build on, and we're expecting around the $200 a week mark rent (less interest payments, rates and water of course) and that house is much smaller than ours. Its a no brainer.

The rental market where I'd like to live is beyond tight and moving into non-existant and tighter again for commercial property. You want something, build it yourself.

[JamesGG]

James,

What is the reasoning you don't live in a property you own and rent whilst you have an IP?

I have heard of quite a few people renting while owning an IP of recent.. would be interested to know why you made that decision?

Hiya Brendan,

It's mainly a numbers thing.

The general theory that I'm hearing, as I understand it, is to buy lots of IPs with lots of good debt, whilst renting the lowest property that your ego can afford.

My story; living in my PPOR gave me something like $10k in govt grants for my first home, and freedom to get away from the parentals. That was pretty cool, moving straight outta home and into my own place at 19.

Used the equity from reno / boom to buy more IPs, shares, build businesses, etc. Highly geared place, but that original loan was bad debt and hadn't gone down at all (interest only).

So, moving out of my old place last year and now renting from someone else means that my bad debt is now good debt. I can also claim deprecation and all that fun stuff, and get another rental income. And, I can live somewhere that I want to live, and not in a property that I don't really like anymore :p

Net result is about $150pw in my pocket better off. And, I can sell the ex-PPOR without any CGT if I do so within six years (well, five now). That's also kinda nice.

Cheers

James.

[gerryonline]

I'd be mad to rent instead of own. My PPoR costs me $50 a week plus $500 a year in rates. I have an IP too and some land we'd like to build on, and we're expecting around the $200 a week mark rent (less interest payments, rates and water of course) and that house is much smaller than ours. Its a no brainer.

The rental market where I'd like to live is beyond tight and moving into non-existant and tighter again for commercial property. You want something, build it yourself.

thats some cheap holding costs! have you held your PPR for a while I assume?

[HWT]

Had it since 2003 and the mortgage has gone up rather than down as I've done some major renovations ... new roof, kitchen, tanks, bedrooms etc.

Got my rates notices for both properties today. PPoR has held steady at $30k valuation for the last 4 years (they give every house in the town the same valuation regardless of size and condition). IP has gone up $10,000 in the last year and
is now sitting at $41,000 more than I paid for it in July based purely on council val.