Landlord Increasing Rent over $85 a Week, Should We Move?

hi guys just want some opinion on the issue. We are currently renting a 2bedroom 1 bathroom apartment in South Yarra VIC Our 12 months contact is coming up with our apartment in SouthYarra and the landlord has contacted us to increase rent from $500 to $585.

We rented the small place (small kitchen that wont even fit a large single door fridge only 1m kitchen bench space for food prep) paid above rental market price during the height of the pandemic with most of the newer apartments going between $350-$450 at the time thinking paying regular pre-pandemic rates will likely to get our lease renewed as moving is a major pain and are not keen on doing it every year. now the landlord has said the market is shifted and the agent has gave them a suggestion that a $85 increase a week is market price, which i think its insane most newer apartments has gone back to around $500. we like the area and prefer not to go through the trouble of moving.

Is our landlord ultra greedy? should we find a new place or even try to negotiate the rent?

Poll Options

  • 525
    Yes
  • 19
    No
  • 75
    Negotiate

Comments

  • +88

    If you can rent a comparable apartment for $500 in the same area then move there.

    • +9

      OP, I think you'll get a real answer if you went on Realestate or Domain and did a South Yarra rental comparison there.

      • +3

        i did. there are few thats going for high $500s(either with excellent view) or large layout, most are still around low $500s high $400s. pre-pandemic level rent is around the low $500s level similar to CBD and inner melb prices.

        • +1

          Have you checked what your rental agreement says regarding price increases? It could be the case that the owners want to live in the property or do rennovations and this is their way of getting you to vacate. You should speak to your landlord/real estate agent.

          • @chrisn26: If you read your rental agreement, the owner has most rights. They can tell you to vacate and give you 60 day written notice. Nothing much you can do at all.

          • +6

            @chrisn26: It's a rent increase. If the owner was moving back in, they would otherwise say that.

            It's a rent increase, deal with it as just that.

            Negotiate (with facts) or move.

        • +7

          Why are you still in the current property then if there's better deals out there?

        • Honestly OP you sounds like a really nice person unlike similar posts on ozb.

          To be honest, why are you paying so much for an apartment, especially in Youth Yarra.

          Second question, why on earth would you choose to live in south yarra?

          • +1

            @CalmLemons: Why wouldn't you?

            • +1

              @fredblogs: Apartments are terrible investments.

              South Yarra is the yuppy suburb capital of Victoria.

          • +2

            @CalmLemons: I'm happy to pay for market price to live around here. both our parents bought houses here, fortunately they got a good deal few years back near the botanic gardens. unfortunately for us we can't afford to buy a house near them. they help out with looking after our baby so we like to stay close. we refused their help with our deposit and prefer to do it our selves.

            I've got a investment house in outer suburbs so as an landlord my self i know i would never rise the rent like this, unless i dropped the rent well below market during the pandemic but i would of told the renter before hand the price will likely rise X amount when its over. We got a decent income to afford to rent a 3 bedroom house here but decided to save a bit renting smaller apartments to one day afford a house in the area.

            i got feeling the agent/landlord prob think with our income and savings this rent rise is nothing, so they went hard on it.

            • +3

              @Creamsoda:

              fortunately they got a good deal few years back near the botanic gardens

              lol that's about 4-6mln of property right there for two houses. Maybe even more now.

            • +2

              @Creamsoda: "got a[n] investment house"

              stopped caring at this point, just now entertained by landlords screwing landlords

            • @Creamsoda: Honestly sounds like you've got enough education and degree of verbal articulation to not worry about $85/week.

              It's nice that you refused the deposit and want to do it yourselves, far cry from the entitlement/blame the world for our own problems post typically on ozbargain.

            • +1

              @Creamsoda:

              we refused their help with our deposit and prefer to do it our selves.

              Take their help, promise to repay them.

              I think you are harming yourself financially by not accepting their help.

      • I agree but rent always increases on renew because of the convenience factor.

        Saying that the rate looks a bit high and people should negotiate and not be willing to move.

    • +2

      keep in mind the moving costs and time though. best would be to negotiate by giving examples of similar rentals on market at lower costs

  • +80

    A 2x1 appt, that you've only been living in for 12 months shouldn't be hard to move. $85 x 52 = $4420 over the course of the year, which will easily cover moving costs

    • +1

      sense!

    • +2

      Agree, the LL doesn't have the power they think they do.

    • Did you include the 4 weeks notice you have to give and will probably only give once you’ve signed a lease for a new place? Unless you wanna roll the dice and see if you can either a) find a place that will let you move in in a months time, or b) wait til the 4th week and try to find a place asap.

  • +16

    Move. If it's worth $85 a week extra to the owner but not to you, your only choice is to move.

  • +13

    Is $85 > or < to you than the trouble of moving?

    • +6

      I think you'll find it's not a one-off payment GG57.

      Although if you are suggesting OP pays one week of rent at the new rate and then just sits on the place until eviction maybe you have a point.

  • +1

    Move out and move on, if you rent then dont expect to stay anywhere long term and you wont be disappointed.

    • Fair but you don't expect to have to assess moving after just 12 months either.

      • You do on the breadline, which OP clearly is not.

        • +1

          OP doesn't work at the TipTop factory?

      • +1

        We do on a 12 month lease, no reason to expect anything more. Managing our expectations and preparing accordingly is one of the easiest things we can do.

      • I've moved once or twice a year, every year, for almost the past decade. It's mostly due to increased rent prices or owners selling / moving back in.

        Only once have I moved because I wanted to, every other move has been to offset costs.

  • +4

    $500+ to rent a 2x1 apartment? That just sounds ridiculous. I hate to think how much extra they will go up if interest rates are increased this year as they are predicting.

    • This year?
      I read they were going up next week.

      • +2

        It's south yarra

      • -7

        wasnt the interest rate suppose to go up last week and the week before that aswell?

        • +7

          Reserve bank cash rate decisions are made on the first Tuesday of every month. It is almost certain that they will start to rise in May or June by 0.25% at a time. Money markets have already factored in about 2.5% in rises over the coming 2 years and this ultimately affects the borrowing costs for banks on their fixed loan offerings. If you look at getting a fixed interest mortgage now compared to 6months ago you will have noticed a huge increase.

    • +9

      Interest rates don't feed into rental prices. They're as low as can be and have been for years but rental prices have been going up. How many places that have been fully paid off by the owner are available at a discount?

      The truth is it's always as high as possible to squeeze as much as possible out. Can't really go much higher than that no matter how high the rates go…the only thing that might happen is speculators might start leaving the market which is a win in my books.

      • +1

        Yes and no. The Australian dream of investment property ownership by leveraging yourself to the hilt (articles like "See how this dishwasher owns 16 properties at 27") will come to a head when they can't afford even modest monthly loan payment increases because of the expectation that rates would stay at 0.1% forever.

        • +3

          Loan repayments are one thing.Nobody talks of the other bills involved like the maintenance costs of the property especially if its an older one. The costs are huge.

          • +2

            @techno2000: They definitely are, I recently had to buy and install a new oven as well as retile the bathroom. Not to mention strata and land tax

            • @Quantumcat: Which is all tax deductable.

              • @serpserpserp: just repair is tax deductible, not capital investment,so only replacing oven is a repair and you get 40 Cents back from your tax for every Dollar you spend so basically losing 60 cents for each dollar spend.

                • @alexm1: You only get 37 cents back if you are in 37% tax bracket which means you are over $120k individual income. Many including me are below that and can only buy investment property because of double income couple.

          • +2

            @techno2000: Exactly. Just offloaded my investment property (older house) for this reason. I spend about $13k per year on repairs, insurance, rates, water bills, agent fees, etc. Plus im out of pocket close to 1k per month on the mortgage.
            Yes there are tax deductions, but that only helps reduce my losses, but still a loss. Add to that the fact principal payments aren't factored into deductibles, it's actually a double whammy. I haven't even mentioned whinging tenants.
            And as a final insult, I'm up for CGT on the profit, and also the selling and buying fees of the place. When you actually work it out, you don't make that much money on investments if they double in value in 10 years. It's really just forced savings, and being able to purchase something with money you don't have. Much better return (and far less headache) in the share market to be honest, and much more liquid.

            • @BlahBlahBlaah: How about you tell us what you charge per week on rent then we can see if 13k per year holding costs is a big dent.

              If your property has doubled, you should not have sold. You should be looking to buy more with the equity. This investment property riches game only works out if you keep adding properties and eventually turn a positive cash flow position.

        • +3

          Why are people so quickly assuming that someone that has accumulated 16 rental properties isn't financially savvy enough to have proper risk management?

          The probability that property hodlers getting liquidated is lower than borrowers that can struggle to scrape together an 80% LTV.

          • +1

            @rektrading: How do you figure that? the person with 16 properties is dependent on the property market. Their income would mostly be derived from the property. If interest rates increase, their mortgage repayments increase, but their rental income does not magically increase.

            Meanwhile your average Joe with 1 property which they live in does not depend on the property market to make mortgage repayments.

        • No worries, you can negatively gear it at the expense of the taxpayers…and hit your tenants in the pocket twice!

          • @Talonparty: Until you put your rent up $85 per week, your tenants post about it on OzBargain and move out and leave you with a vacant period of no income and reletting fees.

    • +1

      Exactly. This is what happens when stupidity has no boundaries.

      Rates reduces way more than reallyt needed by the RBA, buyer going way overboard on price they paid for housing [image $200K plus over reserve in some cases], thinking low-interest rates will last forever, and now the sh!t is starting to hit the fan.

      • thinking low-interest rates will last forever,

        I don't think most people think that. I think they literally just don't think about it at all.

        • +1

          Exactly, people could borrow 200k more, so they spent 200k more. Their budget is always the maximum a bank will give them.

    • It's funny you mention that, first thought on my mind when I saw the price was that's cheap and South Yarra seems like a fun area; I'm in inner east Sydney in a rather happening area and walking distance to the CBD, my last studio I rented was $500/wk (but had great views), a 'good' 1 bedder will set you back $700+/wk comfortably

  • +10

    Move out and let the landlord hodl the 👟box

    • +2

      And put all that money into crypto. Who even needs a house

  • +5

    That was nice of you to donate extra money to your landlord for the past year. Unfortunately you can't go back and change that decision though hopefully you learn from it.

  • that is a pretty big jump but depends on the area and cost of other rentals

  • +1

    Its worth trying to haggle down to something you are more comfortable with, might not work but worth a shot if you like the place

  • +2

    That's a big increase. In SA mine went up $5 a week in Feb after three years with no change. I'd be looking to move on.

  • Is our landlord ultra greedy? should we find a new place or even try to negotiate the rent?

    Step one : check current market condition? Check current price within the same area. If it's same as what's landlord suggested, landlord is fair?
    Step two: based on your finding, if not that much negotiate ?
    Step three: Move out ?

    Or you want us to do the home work for you?

    • Not sure why you got down voted.

      • I think people in this forum think landlord are evil in general lol
        I have been on both side of the coin, as tenant as well as landlord.
        As landlord, I expect agent to do their research and advice me whether to increase or not. Else they not doing a good job.
        They usually have some idea about current letting rates, market etc.

        As a tenant, you need to consider the location, current financial condition and covenant. I don't think OP has consider any of this and just try to question the landlords action.

        It's a balancing act, for landlord, you need a good tenant that last long within the current market rent. Else you be paying for possible damages, loss rent, advertising, been vacant etc.
        for tenant, it be more personal, not just the pain of packing and unpacking, relocating.

        • For what it's worth, I've had only one good experience with my landlord. Almost all my experiences have been negative.

          I don't doubt that there are good landlords out there! And experience is all anecdotal, but the moment I moved out of the country and into the city, all my experiences went to shit.

    • let me revise that option:

      step 1: post it on ozbargain
      step 2: wait for reply and some good Samaritan to do the work for you
      step 3: make decision

  • +3

    simple business decision

    is the rent you could save worth the hassle and cost of moving?

    • will rents fall later this year given cost of living pressures? if so hang on and wait

      • I think It's going to be very hard to get the market rent to decrease, the majority of landlords will hold out. The stereotype investment property owner who is mortgaged up to the eyeballs is only a small proportion of the market, most landlords can afford to leave their place empty for a month rather than lower the price.

        I Expect news articles about a 'renting crisis' and 'shortage of rental properties' which asks the government to give MORE subsidies to home owners, the actual problem of unaffordable rent will probably be glossed over by the mainstream media.

  • +3

    I would -

    1. Counter with an amount you're happy to pay
    2. Challenge the rent amount with Consumer Affairs then go to VCAT (after step 1 is done first)
    3. Leave if it doesn't come down

    Definitely negotiate, unless you're a crap tenant they don't want you to leave. Last time they tried to increase my rent I sent a reminder of all the things that really need fixing that should have been done already (non-urgent) and suddenly they were fine with the old rent price.

    • don't think the landlord will accept it since their rent increase is so out of our expectation. the point of my post is pretty much asking for feedback on whether is worth staying on with a landlord that will hike rent like this.

      they want us to stay since we keep the place clean and is very accommodating with maintenance issues.

      • I think it's worth staying until the hike actually goes through. If you negotiate it back down again, stay as they're reasonable but just looking at a cash grab. If they don't, time to leave. Nothing lost by trying to negotiate down.

      • the point of my post is pretty much asking for feedback on whether is worth staying on with a landlord that will hike rent like this.

        What will stop them from doing it again in 12 months?

      • +7

        My advice is to move out. 2 years ago, my landlord was not willing to drop rent by 10% despite rents dropping around 20% in the area due to surplus in supply.

        I ended up moving out. They ended up leasing it after 4 months from vacating the unit. And they only achieved that after they incrementally dropped the rent 5 times discounting more than 20%. That was a good lesson for the greedy landlord.

        • He could probably afford it and neg. Gearing would have taken care of the rest.

      • In my previous rental I was paying 500p/w for 18 months and the owner wanted to increase it to 575p/w.

        I wrote an email outlining the issues I'd had to deal with along with why I thought 500p/w was fair rent.

        The real estate agent came back with 520p/w which I agreed to.

        Negotiate and include similar rental listings to back up what you're comfortable paying. Don't be afraid to offer less than what you're currently paying if your research indicates that's where the market is.

    • +1

      Why would you waste VCAT’s time with something like this?

  • +23

    If you're thinking of moving anyway, try negotiating first.

    On my rental, the agent upped the rent without even asking me then the poor tenant submitted a long letter about why she couldn't afford that much for various reasons and to please not increase it quite that much, I was shocked and told agent not to increase it at all!!! As I hadn't even requested that in the first place!

    It is quite possible this increase has come more from the agent than the landlord who probably doesn't have any particular need to increase the rent and they will be happy to only increase it by $20 or $40 or $50. Good tenants are worth keeping even for less rent. The next ones could easily destroy stuff and cost way more than the extra they are asking

    • Ya Agents are greedy MOFO's

      For OP - you can get better for less further out.

    • +1

      My agents always asks me prior if I wish to increase it mid tenancy.

      Only once- $10, in the past 15 years due to increase in cost.

      Now with low IR, it's positively geared, I don't really need the money from the rent, I just need the property not to cost me anything to own.

      You're correct, good tenants are worth keeping at lower than market rent.

      "The next ones could easily destroy stuff and cost way more than the extra they are asking"

      Because I have landlord insurance, if the tenants are going to destroy the house, I secretly hope they do a really good job.. free/cheap renovation. I've never claimed on landlord insurance policy.

      • +1

        lol… i would be excited to take up the offer .. but i dont think getting charged for dstruction of property will look good on my resume

    • +7

      you sound like rektrading

      • It is just reality. It is a business investment to most landlords as such they are looking for the best return on that investment.

        • If best return means losing a good tennant and having an investment not producing any returns for a fair period of time, then fine.

          • @SupeNintendoChalmers: Obviously that isn't a smart investment if that is the end result. However if they know that is the market rate then they are most definitely better off even if they lose 1 or 2 weeks rent.

            • @gromit: @gromit I find most investors are greedy (overleveraged) or have negatively geared properties, case in point.

              I have one modest 3 bedroom home that I rent out for $400 per month. up until last December it was $380, but my tenant is a great single mum so I knew that upping the price significantly would cause undue stress to her. Comparable homes in the area are rented for ~$450-500, but I know the value of a long term tenant. Too many people overleverage themselves and negatively gear properties. I positively gear my investment, because frankly I believe negative gearing is immoral.

              • @SupeNintendoChalmers: good for you, but that makes you a charity not an investor. Nothing wrong with that, in fact it is highly commendable that you give to those less fortunate.

                • @gromit: I am a investor though, still make a small profit and have very little debt to my name. Always been happy to make a buck, but not at the direct expense of others.

                  • @SupeNintendoChalmers: The nature of investment is you are always making profit at the expense of others. be it small or large. How you choose to use that profit is entirely up to you, you choose to give your profit to your tenant.

    • +10

      Greed: intense and selfish desire for something, especially wealth, power, or food.

      If they're upping the rent because there's a real need to, such as fear of interest rate rises meaning they could go under on the property, it's not greed.

      If they just want to milk more money out of it because they think they can, then it is greed.

      Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy. You should just own your greediness rather than try pretend you're not though.

      • +2

        So if you ain't starving and you dare accumulate more than that you are greedy?

        Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy. You should just own your greediness rather than try pretend you're not though.

        By your sh!thouse definition of greedy virtually anyone is greedy, including those long gone.

        • +6

          You seem very focused on not being considered greedy, despite that I gave the dictionary definition right there for you. If you're greedy, go watch Wall Street and feel better about yourself.

          It's on you why you're doing it. But increasing the rent on where someone have to try and live just to maximise the return in order to have more wealth seems a pretty stock standard example of greed. Whether that greed is socially acceptable or not is a totally different question.

        • +1

          By your sh!thouse definition of greedy virtually anyone is greedy, including those long gone.

          correct. humans are a greedy species. any other shockers for us?

      • such as fear of interest rate rises meaning they could go under on the property, it's not greed.

        Fearing cash rate hikes is irrational.

        The cash rate hasn't moved in years. It won't make an impact in any meaningful way when it does.

      • +1

        Are you doing those things just because you want to accumulate more wealth? Then sure, you're greedy.

        It's great to wake up in the morning to 60 sec of truth.

        https://youtu.be/6bbzwJ0Sx48

      • By that logic, if I work hard and earn more wealth in order to provide meself buffer or safety net, then I must be greedy because there is no "real need".

        As if the word "real need" is defined by other people. Your definition of "real need" is different to other people.

        • +3

          You ignored everything else I wrote and focused on two words to defend your accumulation of wealth.

          Hmmm, interesting takes notes

          It's totally about the individual as to whether they're greedy or not, defend it however you want, it's not like it's illegal or anything.

      • -1

        Found the commie.

  • +3

    I normally increase only by about $20-$30 a year for existing tenants renewing. Knowing other places many are having $100+ increases a week and I think that's just greed trying to take advantage of the shortages.

    • -1

      Not exactly greed to respond to supply and demand.

      This is not like when scalpers buying scarce items like ps5 or gpus and selling it on ebay for ridiculous prices. Let's not forget that the true greed in the property market are the policy makers. Thanks to negative gearing, hardly any affordable housing options, poor city planning (they manage to do covid modelling well which arguably is more complex than city planning). Surely the only explanations to these has to be greed.

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