Hi,
details of house
3 bdr brick.. $220,000 Rented for $170pw
Ive been renting my house in Ballarat to a friend and his family for the past 5 years privately.I have been charging about 4% of the value of the house. I have raised the rent 3 times in 5 years and when i told him it is getting raised again to $185 he told me I cant as its against the law to raise it more than 3 times..
I cant see how this could be true..
Does anyone know about any such law?Also Ive been checking the internet for similiar properties in the same area and the asking price is from 200 to 220 pw..
Thanks,
DoncossackHi Don,
You have just demonstrated why renting to family and friends can be problematic unless clear guidelines are maintained.
Your friend is out of line – according to the Victorian Consumer Affairs there is no such numeric restriction.
Checkout the VCAT website – I have a copy of the tenancy act of you want. Drop me an email with the subject Vic Tenancy Act and I’ll send you a copy.
Besides the guy has been there for five years anyway – what does he want?
I am also intrigued as to your method of determining the rent you want. I would suggest that you are leaving yourself short – let the market determine the rent and more often than not you’ll find yourself ahead – in this case potentially $40/week short.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958how do people even come up with such nonsense laws and try to convince others that they exist?
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582Definetly can’t be such law.
Sounds like you shouldn’t have a problem finding a tennant at that competitive rate….Thanx Heapz
Rayson
Originally posted by Doncossack:Hi,
details of house
3 bdr brick.. $220,000 Rented for $170pw
Ive been renting my house in Ballarat to a friend and his family for the past 5 years privately.I have been charging about 4% of the value of the house. I have raised the rent 3 times in 5 years and when i told him it is getting raised again to $185 he told me I cant as its against the law to raise it more than 3 times..
I cant see how this could be true..
Does anyone know about any such law?Also Ive been checking the internet for similiar properties in the same area and the asking price is from 200 to 220 pw..
Thanks,
Doncossack4%…(sigh)
I can remember when it was 10% of the properties current value for rent ex- $80,000 IP $80 p/wk..easy.
Must be getting old[cigar]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorNot sure but that “law” sounds like a load of crap to me.
Tell him that you have to get fair market rent on your IP, whether with him or with new tennants.
This cosy arrangement (for him) must stop.
Good luck!Hi Don,
I have a little more time on my hands this morning and here is the direct quote from VCAT’s ‘Renting a Home – A tuide for tenants and landlords’
If the tenancy agreement is a fixed term agreement, the landlord or agent cannot increase the rent before the end date, unless the agreement states otherwise.
In any case, a landlord or agent must not increase the rent payable under a tenancy agreement more than once in any six-month period.
The landlord or agent must give the tenant at least 60 days notice of any rent increase using the ‘Notice of Rent Increase to Tenant/s of Rented Premises’ form.
If the tenancy agreement is a fixed term agreement, the landlord or agent cannot increase the rent before the end date, unless the agreement states otherwise.
In any case, a landlord or agent must not increase the rent payable under a tenancy agreement more than once in any six-month period.
The landlord or agent must give the tenant at least 60 days notice of any rent increase using the ‘Notice of Rent Increase to Tenant/s of Rented Premises’ form.
When a tenant thinks the rent is too high
In certain circumstances, tenants can write to the Director of Consumer Affairs Victoria for a rental assessment if they think the rent or proposed rent is too high.This can only happen when:
• the landlord or agent has given a ‘Notice of Rent Increase to Tenant/s of Rented Premises’ that the tenant thinks is excessive (after considering market rent) or
• the landlord or agent has reduced or withdrawn services, facilities or other items that are part of the existing tenancy agreement.A request for a rental assessment must be made in writing within 30 days of receiving the ‘Notice of Rent Increase to Tenant/s of Rented Premises’.
The tenant has 30 days from receiving the rent assessment report in which to apply to VCAT for a hearing. VCAT may set a maximum rent, which then stays in force for 12 months.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Looks pretty much the same as WA’s Derek?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI agree Redwing….looks almost identical….these agencies wiping the noses of tenants must talk to one another.
What an absolutely disgraceful set of rules that one must abide by. It’s conditions such as those and then some ;
“A Landlord must not….”insert good thing”…”
“A tenant may….”insert bad thing”….”
This would have to be one of the major reasons why we went away from RIP’s. Having broken away, it is absolutely fantastic not to be hamstrung by such one sided Acts.
Don…make a decision – who are you dealing with, a friend or a tenant ?? To my mind you can’t have both.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
I suggest that you remind your friend that he has choices.
Find out the current market rent of such a house. PMs will bend over backwards to tell you what they think they can get for you (might not even hurt to pass it to a professional manager either).
Your friend can choose to pay market rent or try his luck on the open market.
Sounds like this is a one way friendship to me [blush2]
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi,
Thanks everyone for their input and comments as its always good to discuss these issuses with people who deal in the industry.My poor friends feels that he has been done wrong by…
It should be a win win situation as he should be able to rent it a little bit cheaper and in return we dont have management fees to deal with and i have a long term reliable tennent.
From now on i will never mix business and friendship…
I think i’ll give him 3 options
1- He pays the rent i have asked for even though its still about $30 under the market rates and thats it.
2- He moves out
3- We go through an estate agent and he can pay the inflated rate…
I’ll have a vodka for you all!!![biggrin]
Signing out from mother Russia,
DoncossackHi Don,
You are such a considerate friend – maybe you are being too considerate?
Got me thinking about my situation, i have renewed with current tenants for commercial property — but is it possible that they can ask for rent reduction in some circumstances – and what are they?
Maybe if property value dropped, does this justify them requesting a reduction in rental? [blush2]
Are there other ways to mitigate rental reduction requests?
Inherited these IP from grandmother and now I am learning as much as I can about PI.
Good luck to all.
Alex
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