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I was just thinking that I felt that Western Sydney is a part of Sydney which follows the whole Sydney market, that is, when Sydney booms, it booms, but when Sydney crashes, it crashes. Whereas, when I look at the graphs of innerwest and inner city it almost runs a lightly different market to Sydney, that when Sydney booms, it booms, and when Sydney crashes, it just stagnates but does not crash and therefore paying a premium for more stable growth? Not sure if this is true or not though. What do you think?
Have about $100,000 to spend, targeting high LVRs.
High capital growth in the short to medium term, high capital growth in the long term. Cash flow can be slightly negative for the first few years with a view to neutral position after short to medium term. Overall portfolio maximum $200 negative cashflow per week, currently at about positive $50 per week.
Strategy is to have as much equity growth in the short term so that I can diversify from bluer chip properties to more modest markets such as Western Sydney once the market goes into a downturn in 3-4 years time. Or, if I can get good deals in Western Sydney right now I would jump on those but it doesn't seem like much out there at the moment. Prefer to buy before Christmas this year.
Yep that's correct Jamie
Sorry I might have been posting in the wrong thread. I posted this on Whirlpool and people were hoping for my tenants to trash the place etc.
Well as I said, I'm not pulling these numbers out of thin air. I'm not sure why people keep assuming that.
– The market rate (a fair rate, what everyone else is paying etc) is AT LEAST 520 for the exact same room, features, etc
– The vacancy rate in Lidcombe is quite low at the moment and rental properties (at least good ones) are hard to come by at the moment
– There seems to be a waiting list of people ready to move in
– I am losing money on my mortgage for no good reason
It was a combination of these factors which lead me to want to increase the rent, I didn't look at anything in isolation. From what I've heard these are currently good tenants and they look after the property, but at the end of the day real estate investment is a business.
For example a business like McDonalds, yes you definitely need to have good service (fast, efficient, friendly etc), but you can't be selling stock at less than the market value. Let's say if Burger King, KFC, Pizza Hut (I'm only making up the names because I can't think of anything else) all around you were selling the same burgers next door for 5 dollars a pop like hot cakes and we were only selling for 2 dollars a pop, then no one could blame us for putting up the price. It's not like I'm putting up the price of the burger to 10 dollars a pop, then people could vote with their feet – fair enough. I'm increasing to market value which is 5 dollars a pop and getting crucified for it. Why don't you go out and crucify the other stores for selling at 5 dollars a pop to begin with? In fact I've essentially given them a huge discount by selling for 2 dollars.
This is what I don't understand. Sure I realise most of the people on forums are renters, so fair enough an 80 dollar increase (17%) is massive, but the tenants were getting a huge discount for a significant amount of time and from the available data and statistics it looks like I could get a tenant quite easily.
But all in all I appreciate the replies to my thread, even though some have been abusive, I've learnt a little to say the least.
I'll just say this again:
I have not given the tenants any notice of increase as of yet. I'm still planning my moves with my new REA (after he inspects) and I am considering two rent increases of 40 dollars each.
The REA rang me today and stated that he would be happy to hand over the management to my new REA right away. Management has already been transferred over to my new REA as of now. It's likely that the original REA didn't want to put up with my demands considering he had already been let go, or that he had seen this thread pop up on the internet.
Probably my poor English in the original post but the rent has not been increased yet and the tenant has not yet been notified of anything that has occurred so far – so hopefully this will be a fresh start for me.
At this stage hopefully the inspection will happen tomorrow and we will make a decision early next week of the rental increase. After all the posts I've seen I'm thinking of increasing to 520 or 530/weekly (which is 30 dollars below market rate), sign a 6 month lease and then increase to true market value after another 8 months.
In terms of the figures provided, I am not making up numbers in my head as many of you believe. I went to 4 other REAs in the area.
– One quoted between 560-580
– One quoted 530/540
– Another 520
I repeat this but there are same properties with one less bedroom renting for almost 40 dollars more so I think that the market value is definitely at least 540 at this stage. Apparently the vacancy rate in my suburb is also extremely low and the demand for rentals it quite high.
Finally, in the past 3 years I have not been overseeing this property. My family has. My family has definitely communicated with the REA in this time and been advised not to increase the rent because they were good tenants. My family are not natural property investors so they listened to the REA. The current REA knew that the market value was almost 50 dollars above the rent we were charging AND knew that the vacancy rates were quite low.
