- harb wrote:But lets say you are right and interest rates go up, if they do its because the inflation is picking up and if inflation is picking up your rent will go up to cover your LLs extra costs. Unless you're renting from your employer and the rent is pegged to your wage you still get shafted by higher rates. Not to mention that with higher inflation, higher rates and higher rental returns you get higher house prices so even if you change your mind and make the move then you'll get less house for your mortgage and at a higher repayment rate. Just something to think about.
ACT has some of the more tenant friendly laws in Australia, though they are still lacking compared to the rest of the world.
Rent can only legally go up once a year at a CPI adjusted amount here and, without reason (ie: LL needs to increase rent past CPI amount) a tenant is given a minimum of 6 months.
On top of this, the amount of rental properties available (ACT anyway) has been increasing this year and the asking amounts slightly decreasing (though it is still a bit more than what I am paying).
Sure, LLs will advertise with higher rents if inflation kicks in but will they be able to get tenants?
The bigger problem facing tenants is LLs defaulting and the bank reposessing inside a fixed lease. This is why asking the neighbours for a bit of LL history before signing the lease is the most prudent thing for a tenant to do nowadays – make sure the LL has had the place 10 years or more.
You are not considerring the 4th option of stagflation. Inflating day to day costs with stagnant wages and depreciating assets. Something for you to think about…
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