I own 4 units in inner Brisbane suburbs (Auchenflower, Kangaroo Point and Lutwyche) and 1 in outer Brisbane suburb (Calamvale). Each time the lease has come up for renewal, even if the current tennant is moving out, I have asked the managing agent whether or not I should increase the rent. Each time they have advised me not to increase the rent for fear of scaring off either a renewal by the current tennant, or a prospective new tennant should the current one move out. I have taken this advice because I assume they know the local market and I don’t want to have my units vacant. I have also suspected that they are telling me this because it makes their job easier by not having to convince the tennant that the rent increase is justified. This has been the case for nearly 3 years. Please note that they are managed by 4 different agents, each saying the same thing.Does anyone have any comment on this? Kezza1
I suppose when it comes to units there’s always another one around the corner so competition for tennants could be stronger. I wasn’t aware that there was a problem with vacancies in Brisbane area. I own a few houses in Brisbane and have never had any real trouble finding a tennant, bearing in mind that the houses were purchased between $130,000 and $175,000 don’t require high rentals to cover costs whereas expensive 250,000 plus units may well do thus making them less attractive top tennants. Maybe you could tell us a little more about the current rental you are getting so we can get a handle on where you’re at?
MJK
Surely you could have written into the lease agreement that rent increases with inflation, so at least your rent maintains value.
Check what other similar properties are yielding, it seems a long time to not raise rent.
I have a suspicion, that managers are very conservative with rentals, as they wish to have tenants in place and collect their share, rather than have the place empty for too long.
I have had the same issue.
i have recently raised the rent on a couple of my exixting tenants, despite protests, my warer/council/insurance rates are rising steadily. we should at least keep up with CPI.
The good thing is that we have never had any problem finding tennants, the longest vacancy being less than 2 weeks. That’s what makes me wonder if the agents are being a bit slack. If there are long vacancies between tennants, naturally you don’t increase the rent but finding a tennant doesn’t seem to be a problem so why do they advise not to increase the rent. Living in Melbourne, I’m swayed by the agent’s advice.The two Auchenflower 1 bed units were purchased for $160k and rent for $200 pw, Kangaroo Point 1 bed purchased for $130k rents for $180pw, Lutwyche 2 bed purchased for $189k rents $230pw, and Calamvale 3 bed purchased for $179k rents for $240pw.I’m content with the returns, as after all claims etc, they EACH cost us about $20 pw out of our own pocket to keep.I don’t know whether to go with the flow, or increase the rent and risk vacancies.I suppose when it comes to units there’s always another one around the corner so competition for tennants could be stronger. I wasn’t aware that there was a problem with vacancies in Brisbane area. I own a few houses in Brisbane and have never had any real trouble finding a tennant, bearing in mind that the houses were purchased between $130,000 and $175,000 don’t require high rentals to cover costs whereas expensive 250,000 plus units may well do thus making them less attractive top tennants. Maybe you could tell us a little more about the current rental you are getting so we can get a handle on where you’re at?
MJK
Kezza,
Your rents look pretty healthy. 200 per week for a one bedder is good. Was looking at a Melb one bedder getting only 150. I dont think your units will ever be 11 second rule properties because they are within 15-10klm radius of Brisbane so what you will be achieving is good capital growth at the moment.
I think if four agents are telling you the same thing its probably worth listening to. Dont try to turn an inner city investment into an 11 second rule investment. Remember that the +ve cash flow guys on this website are investing in rural areas and NZ.MJK
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