Rent/Expenses Increase Trends

[WestonSF]

I'm a pretty novice property investor and I like to do a lot of budgeting and planning. For those more experienced investors, I'm just wondering how you have noticed rent and expenses increasing over the past ten years and how to budget for this in the future.

Do you increase rent each year and by how much? Or is it just dependent on how the market is?
How have you seen expenses increase on your properties over the years? e.g. insurance, rates and management.

Do the rent increases out pace the expenses?

[Damap]

Hey Weston if you go to Landlords site you can plug in your town and look at the actual historical rent and price trends.

[Rosco]

Hi Weston,

When I review clients rent year by year, they hardly change at all. Last year I had a look at who I consider to be a really good landlord, who pushes for good rents and manages his properties well. His annual rent from 10 years ago was really similar to now! This client was Hamilton based.

So I think a lot of growth in rent outside of Auckland isn't the existing properties rent going up, it is instead new properties being built and having higher rent than the older ones.

Ross

[Damap]

May be true outside of Auckland but in Auckland woo hoo watch those rents grow :-)

[eri]

we've just rented a 2bed apartment, to 2 new students, for the same amount it was last year

pretty sure rates and BC charges have risen every year we've owned it

but the rent only goes up every few years when the average rents in the building show it's under-rented

typical swings and roundabouts in business and everything else

[speights boy]

For many existing landlords their biggest expense - interest cost - has reduced quite a bit over the last 5 years.

[eri]

after the asian financial crisis of 1997

coca cola dropped the price of coke in the markets, like thailand, that stopped buying as much

and balanced that by increased it in japan

was it fair to do this?

it that even relevant?

we have received notice from council that 1 of our apartments may need expensive remedial work

if the bill is large

should we seek 'make very sure' we aren't under-renting our other rentals to help pay for the work?

it's common enough in business and life in general

to take a big picture approach to balance

council tell us they are taking a 'big picture' approach by raising rates on the north shore

to fund public transport south of the bridge

police speeding fines don't go to road improvements fund

etc

etc

etc

it bites

when you're bitten

but you can't expect everyone and everything to work only to your advantage

[WestonSF]

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11393120

Check out this map. Generally looks like most urban areas increase in rent, but rural areas less so.

[WestonSF]

Looks like they take into account inflation too. When you say annual rent from 10 years ago is similar to now, is this adjusted for inflation?

[elguapo]

Looks like they take into account inflation too. When you say annual rent from 10 years ago is similar to now, is this adjusted for inflation?

There is no mention of it being inflation adjusted at all.

[PTILoveYou]

http://www.nzherald.co.nz/opinion/ne...ectid=11393120

Check out this map. Generally looks like most urban areas increase in rent, but rural areas less so.

I think the values must be inflation adjusted.

No way central auckland rents only increased 5% since 2001!

My mt wellington unit rents went up 25% over the last 4 1/2 years!

[ivanp]

yes, they are adjusted:
"The median rent values for 2001 and 2006 census are adjusted for inflation."

[elguapo]

150 people queuing for a rental.......

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11394453

I'd have an absolute fit if a property manager had 150 people to a viewing for one of mine.

[Viking]

Imagine the anguish if you picked one lot that turned to custard.

OMG

[donthatetheplayer]

Here we go. I expect this will be a continuing trend.

Asking rents on Trade Me Property are up 9% compared with a year ago

http://www.interest.co.nz/property/7...pared-year-ago