Renting – a landlord’s perspective

[Incata]

funny, i just skipped 5 pages to see how this thread had developed (am i the only one who does this? be honest!) and ended up on this....

 

the exact reason why i laugh as i drive through point cook. both here and sanctury lakes are full of houses some aproaching a million quid that are leaky, noisy, just plain shite'y.

the finish is immaculate, but the houses themselves are comical as far as performance is concerned. you will pay dearly all the time the outside temp is not the same temp as you want inside.

pretty much a turd rolled in glitter.

 

and.... thats why we have to build out here. its not that we want to. we have to!

 

We have bought an older brick house which is quite solid, but it really does amaze me what they have considered acceptable in building it. Why on earth do you put windows in and then leave gaps round the frame so that the wind and the rain can get it? Is it too hard to build a wall straight?

 

It does amaze me just how low the standards are here. Again I found it a real shock that new builds are only expected to last for 17 years, when a typical mortgage is for between 25 - 30 years! Fortunately we bought an older house but the amount of work we have to do to sort it out and bring it up to what we would consider an acceptable standard is very surprising (although we did factor it in to the amount we paid for the place). If we had not found this place I think we would be looking to build new (with us in charge of how it is done and who does the work!)

[Nats]

There is really no need to be rude to BB. He is running a business, not a charity. Name calling is childish and immature and you can disagree without making personal comments.

 

I'm sure BB has a thick enough coat & is earning enough profit not to lose any sleep over my comment. But thanks for the wrap on the knuckles anyway. I'll be sure to keep my opinions to myself in future.

[flybyknight]

We have bought an older brick house which is quite solid, but it really does amaze me what they have considered acceptable in building it. Why on earth do you put windows in and then leave gaps round the frame so that the wind and the rain can get it? Is it too hard to build a wall straight?

 

It does amaze me just how low the standards are here. Again I found it a real shock that new builds are only expected to last for 17 years, when a typical mortgage is for between 25 - 30 years! Fortunately we bought an older house but the amount of work we have to do to sort it out and bring it up to what we would consider an acceptable standard is very surprising (although we did factor it in to the amount we paid for the place). If we had not found this place I think we would be looking to build new (with us in charge of how it is done and who does the work!)

 

if you do build be very careful, the standards themselves are skewed towards building poor houses.

for example, air tightness is assumed when insulation is checked for performance. if wind is blowing through, any amount of insulation is degraded.

with airtightness in mind, 5 natural airchanges in a european house is considered 'leaky'. the same performance, by Australian standards is 'completely airtight'!

i wonder what an Australian builder would charge you to build a place completely airtight?

 

its a broken system.

[Incata]

if you do build be very careful, the standards themselves are skewed towards building poor houses.

for example, air tightness is assumed when insulation is checked for performance. if wind is blowing through, any amount of insulation is degraded.

with airtightness in mind, 5 natural airchanges in a european house is considered 'leaky'. the same performance, by Australian standards is 'completely airtight'!

i wonder what an Australian builder would charge you to build a place completely airtight?

 

its a broken system.

 

Thanks for that. I really don't know much about the standards here, other than the ones I have seen in the construction of our house, which are very poor. I appreciate that the house is quite old, but even when we had Australians put in solar hot water, they left the roof in a dreadful mess and considered it to be "fine". They came on recommendation from a neighbour, so suffice to say we were not overly impressed. Cheap and nasty seems to be the preferred Australian standard.

 

We only have UK trained tradesmen working on our house now, as their standards are so much higher.

[Nats]

Thanks calNgary, you summarised my post nicely! Reviewing all the other posts on this thread...I'm not the only one who implied /detected greed as a motivating factor in the landlords perspective. As a renter, naturally this gets my back up! Anyway, thanks again.

[flybyknight]

Thanks calNgary, you summarised my post nicely! Reviewing all the other posts on this thread...I'm not the only one who implied /detected greed as a motivating factor in the landlords perspective. As a renter, naturally this gets my back up! Anyway, thanks again.

 

i don't think greed denotes a good or a bad landlord.

if there were no financial reward why would anyone put themselves through the hassle of managing a property?

with no financial incentive there would be no private landlords. for better or worse, cash is the only real reason most exist at all.

the negative gearing available in the australia tax system means a renter can live in an area far outside their capabilities for purchase. and this clearly gives the renter a big advantage.

this seems to be the system as i see it. i guess if a person doesn't like it, they can buy.

[Nats]

I disagree. Of course the landlord has to make a profit, otherwise what would be the point? However setting the price somewhere just above the mortgage repayments, enough to cover rates & put aside enough for overheads & any maintenance issues that should crop up is one thing, ripping the tenant off in order to bolster ones savings is another. Seems to be all take & no give. The OP, suggested a good tenant might leave the property in a better if not improved state upon exit. How is that fair? No thanks for looking after the property, ensuring its resale value, the tenant can expect an untapped rent increase at the end of each lease term. There is no option to rent /renew for greater than 6-12months in most cases therefore the tenant is likely to incur rent hikes each time, meanwhile no efforts are made to upgrade the property, not even a fresh lick of paint!

If only it were so easy for a dissatisfied tenant to just buy. Property developers & greedy landlords have driven the market to the stage it's at making it very difficult for 1st time home buyers to get on the market at all, not only in Australia but in many countries around the world. It's a big problem & when the economy takes a downturn greedy investors will get their comeuppance. So many families in Australia have lived in rented accommodation for 20+ years, raised their families in their rented 'home' only for it to be sold under their feet. Heartbreaking, but I guess it's the landlords prerogative and at the end of the day highlights a bigger problem. Many people would prefer to own their own home, hang pictures, buy a dog, decorate to their taste, live in the suburb they grew up in...but it's often unachievable and investors are at the root of this imbalance.

[buzzy--bee]

I'm sure BB is earning enough profit ....

 

Actually, I lose about $500 per month on each of my properties, but thank you for your concern.....

 

Of course the landlord has to make a profit, otherwise what would be the point?

 

Capital growth is the point, not operating profit.

 

However setting the price somewhere just above the mortgage repayments, enough to cover rates & put aside enough for overheads & any maintenance issues that should crop up is one thing, ripping the tenant off in order to bolster ones savings is another. .

 

So you are actually suggesting I should increase the rent I charge by $125 per week, or about 30%. And that's just to cover costs, not put anything aside.

 

BB

[Nats]

"Actually, I lose about $500 per month on each of my properties, but thank you for your concern....." I'm not in the slightest.

 

"Would you forego $85000 + per year because you like your tenant? I wouldn't. A lot of people don't even earn that."

 

 

"Sorry Winneth, all my properties are let right now, in fact I have never had a gap in tenants in any of my properties greater than 2 days. However I do have a tenant who is currently defaulting on rent so that place may come vacant soon." Seems a bit contradictory but none of my business, I don't care how lucrative or not your particular enterprise is, my opinion is of the overall Landlord /Tenant relationship and Landlords accepting /expecting higher rent for nothing in return. Down to personal experience.

Rented an inner city apt for 18 months (supposedly luxury but not quite). After 6 months..."we regret to advise weekly rent will increase by $10 to cover increasing rates" acceptable. 12 months later, "should you wish to renew your tenancy for a further 6-12 months this will be at an increased rate of $30 per week". Why?? No explanation. Withdrew my application to renew and low and behold "the landlord is willing to deduct $10 p/w from the increased rent should you wish to renew". Why?? Most likely because they could! And I know of other apartments in same complex are much cheaper so I'm expected to not only cover their mortgage + fees but give them pocket money too?? I think not. They lost a good tenant. I expect to pay a fair rate that is all.

[Peach]

So you are actually suggesting I should increase the rent I charge by $125 per week, or about 30%. And that's just to cover costs, not put anything aside.

 

BB

 

And lose that juicy negative gearing.. hell no...

[buzzy--bee]

And lose that juicy negative gearing.. hell no...

 

Negative gearing just means you are losing money. I would prefer to have my properties positively geared, but the rental rates that the market will stand will not allow this.

 

BB

[Peach]

Negative gearing just means you are losing money. I would prefer to have my properties positively geared, but the rental rates that the market will stand will not allow this.

 

BB

 

It also means that by showing a loss on your tax return you have somehow 'over paid' your taxes....

[Winneth]

BB is correct. Bank references or statement is a good way to show that you have the financial means to pay the rent. Proving work references also allows the agent or landlord see your viability in the workplace here in Melbourne. When my clients are leaving a home they own overseas and having that rented out via an agent, I get them to ask the agent to provide a copy of the rental agreement so the income coming from their home can be taken into account.

 

Landlords and the way the maintain properties are as different as personalities. Just an hour ago, a possible local client told me that he is thinking of moving out of his house because his landlord is very averse to anything growing in the back "garden". The landlord doesn't want any shrubbery, lawns or any plants because he just wants the grey concrete look. I know of a landlord (my friend's mother) who goes into her rental and does a maintenance check every two weeks. (yes, she was sued because she was ruining the enjoyment of privacy...that's another story).

[buzzy--bee]

my opinion is of the overall Landlord /Tenant relationship and Landlords accepting /expecting higher rent for nothing in return. Down to personal experience. Rented an inner city apt for 18 months (supposedly luxury but not quite). After 6 months..."we regret to advise weekly rent will increase by $10 to cover increasing rates"

 

If my property manager requested an increase in rent based on an increase in costs I would be concerned. The rate is set by the market, the availability and cost of competing properties, the number of tenants vs the number of vacancies etc etc. Not by the cost base.

 

I'm sorry you have had a bad personal experience with renting. I did too when I was a tenant, with repairs not done for months. I vowed when I became a landlord to treat my tenants well and do repairs quickly. But in return I do expect the rent to be paid on time and the place to be looked after. It's not rocket science on either side.

 

BB

[Peach]

When my clients are leaving a home they own overseas and having that rented out via an agent, I get them to ask the agent to provide a copy of the rental agreement so the income coming from their home can be taken into account.

 

That IMHO is pure voyeurism. I am so glad I don't rent.

[Nats]

"Landlords and the way the maintain properties are as different as personalities. Just an hour ago, a possible local client told me that he is thinking of moving out of his house because his landlord is very averse to anything growing in the back "garden". The landlord doesn't want any shrubbery, lawns or any plants because he just wants the grey concrete look."

Would the tenant be happy with pot plants? Surely the landlord can't disagree with that? They are mobile therefore can be removed on exiting the property? It's a back yard, not likely to deface the appeal of the property from a street aspect. To refuse would be like saying I don't like your furniture. Should put it to the tenant, be easier than finding a substitute rental, change of address, cost of removals & cleaning plus coming up with another bond before existing bond is refunded. I'm going through it just now & I can verify its VERY stressful!

 

 

 

 

"I'm sorry you have had a bad personal experience with renting. I did too when I was a tenant, with repairs not done for months. I vowed when I became a landlord to treat my tenants well and do repairs quickly. But in return I do expect the rent to be paid on time and the place to be looked after. It's not rocket science on either side."

I've had good and bad rental experience over the last few years. I find realtors, gate keepers of the bond to be worse. My more pleasurable experiences have been via private lets. I have moved around a fair bit, 1st rental was a stop gap just to get settled in Oz before finding more permanent address, then I moved interstate & moved into afore mentioned apartment, was fine for a while, convenient for work, modern & good facilities - but very overpriced & of course I'm not one to be ripped off! My current rental (for the next week in a half) is my favourite, a reluctant end to tenancy. Property has sold in just 6 months of us being here. It was on the market for 18 months before we moved in, I presented it well & turned the drab courtyard into a delightful garden. The estate agents attribute the sale to our care & presentation of the property. I have glowing references, never had bond denied (some pesky agents have tried but they didn't get away with it) and we pay A LOT of rent. We will hopefully buy at the end of our next 12 month lease, have approached broker to test the waters, see what we can afford & he was trying to talk us into not only buying a home but an investment property! Therein lies the destruction of the Australian economy. Too many people taking huge risks on taking out more than one mortgage with little backup!

[Winneth]

Hahahah. Yoyeurism, proof of income... anything to do with showing how much you earn for whatever reason is some form of voyeurism. Big brother is watching.

 

Is it just me or did this thread that was well intentioned turned into a shitstorm? In my line of work, I see more of bad landlords than bad tenants. I'll repeat that: it is because of the nature of my work. I'd say there are few unprofessional horrible agents which I have blacklisted from my list. But there has been a lot of good ones as well. I'm sure it is the same for tenants and landlords.

 

Of course landlords want to increase their assets. If you have the means to increase your financial worth, why not? I don't think it is an evil thing unless the landlord becomes greedy and unreasonable (where TUV or VCAT comes in). There is a National Rental Registry as well and it is where the rental history of people are lodged to give the landlord a perspective. A tenant who is looking for a place can opt not to go into an agreement with a property that is not addressing any of their needs. Depending on how much a client can afford, I'll make sure that they get their money's worth. If the rent is too low, I'd be finding the reason out. If it is too high, then we walk away. This is the reason why it is a called a business: It's like buying a cupcake. it looks good. you want to buy it. But it depends on the price. If the price is good, you buy it. Then you taste it. If you like it, then you buy some more. On the other hand, it's also like selling a cupcake. You make it look good so people are attracted to it. Then you price is correctly so people would buy it. Then you make sure it tastes good, so they come back and get more.

[Peach]

Hahahah. Yoyeurism, proof of income... anything to do with showing how much you earn for whatever reason is some form of voyeurism. Big brother is watching.

 

To qualify my statement, you are asking for something that even an Australian mortgage company wouldn't be entitled to see in considering a mortgage applicant.

[Xenon4017]

To qualify my statement, you are asking for something that even an Australian mortgage company wouldn't be entitled to see in considering a mortgage applicant.

 

I'm inclined to agree. As a landlord, you should be able to tell during a short interview whether you want to rent to someone or not. Asking them for documentary proof is tantamount to calling them a liar. It would be like the tenant asking the LL for proof that they really are the owner.

[jimmyay1]

As well as being a property Landlord i also work in the industry full time in Oz, and did in the UK for many years.

 

People become Landlords for many reasons and lots have different perspectives. There are professionals, amateurs, and some for who it's in the blood.

 

Some Landlords are rapacious, greedy individuals devoid of feeling, some are decent human beings with class and respect towards their tenants and run professional investment and lettings businesses.

 

The problem with the many amateur Landlords down under is that they are not well capitalised but they think they are property wheeler and dealers, running their investments at a cashflow loss and subsidising the mortgage from their primary income then claiming tax back, whilst hoping the capital value escalator continues. It's just wide-boy style speculation.

 

Many will get a shock when markets turn, as like all markets property markets are cyclical. In fact more so than in the UK i often come across properties on the market which are repossessions by order of the bank, it happens all the time. People take risks and gamble here on property more than in the UK and many get burnt, although they keep it quiet. Bad quality rentals and badly treated tenants are just the collateral damage in this greedy game of pass the parcel. I wouldnt want to be holding some of these grotty, hard to let properties that have had no investment for decades when the music stops!

[buzzy--bee]

I wouldnt want to be holding some of these grotty, hard to let properties that have had no investment for decades when the music stops!

 

I agree. I haven't got the guts to buy crap. All my properties are near-new. But I totally understand why people buy them - for the land value and subsequent redevelopment potential.

 

BB

[Winneth]

Mortgage company asks for payslips and expense records to prove there is a regular income to pay off the interest and loan. But for people who do not have a job when they first arrive in Australia, this is the best way to prove that there will be enough to cover a few months' rent. At the end of the day, I want my clients to have a home. Anyway, before my clients get here they would have shown these statements to other private and government organisations who will be requiring that.

[Winneth]

As a landlord and having an agency take care of the management of the property, I didn't interview anyone. I did know which agency and agents I could entrust the running of the affairs. But you are right though, you should be able to get information through an interview, as well as other documentation. It's a business relationship so it shouldn't get emotional to brand someone a liar.