50% planning to leave rents unchanged??

[jporteous]

Depreciation has been removed, interest rates will be climbing; council rates continue to climb; repairs will lift with GST, and there is a looming housing shortage. And yet a "...survey of 2,459 landlords has found just under half say they plan raising rents as a result of the Budget". ??? As an industry we need to start treating property investment as an investment. What other industry would not pass on their increased operating costs to their customers? Especially in an environment when our customers are expecting an increase.

"BNZ chief economist Tony Alexander picked last week that house prices are going to rise after a result of changes announced in the budget, this is not likely to take effect until changes announced in the budget are implemented from October. He added that landlords should be raising rent.

“I see that a survey of 2,459 landlords has found just under half say they plan raising rents as a result of the Budget. My first response to that is that the over 50% planning to leave them unchanged illustrates quite well the lack of business nouse amongst average Kiwis,” Mr Alexander said".

Article link = http://www.nbr.co.nz/article/propert...tations-123962

[Propoholic]

“I see that a survey of 2,459 landlords has found just under half say they plan raising rents as a result of the Budget. My first response to that is that the over 50% planning to leave them unchanged illustrates quite well the lack of business nouse amongst average Kiwis,” Mr Alexander said".

I think Tonys comment is quite correct, at least 50% of landlords probably wouldnt have a clue what is going on in the rental market at any one time. That 50% will just lag and follow the rest (other 50%) of the market. Auckland inner city rents are moving strongly at the moment.

[drelly]

The problem is that for the great majority of landlords, their rental is more of a nest egg than an active investment.

[Propoholic]

That's right, it comes back to 'running your property investment like a business'.

[jporteous]

Do people have a feel how the property management companies will approach this? If the owner isn't hounding them to lift price will they still pro-actively lift it?

I don't know the percentage that the professional firms manage but I assume it is large. If they all try to lift rents surely it would have a big impact on the industry..

[graemeh]

Do people have a feel how the property management companies will approach this? If the owner isn't hounding them to lift price will they still pro-actively lift it?

Our property manager does this anyway. They always review the rent as the fixed term tenancy comes up and recommend a new (usually higher but not always) rent for the next year.

[WGN ex-property manager]

We routinely raise rents between fixed term tenanacies as much as the market can bear without instructions from the owner.

We only discuss with the owner of we're really pushing the limits and might expose them to an increased risk of vacancy.

[fullom]

http://www.dbh.govt.nz/market-rent

I think Tonys comment is quite correct, at least 50% of landlords probably wouldnt have a clue what is going on in the rental market at any one time.

[cube]

The impact of removing depreciation won't be felt until the non-appearance of the usual tax rebate at the end of the 2011-2012 tax year, so if you are looking for a reaction, look then.

[jporteous]

The impact of removing depreciation won't be felt until the non-appearance of the usual tax rebate at the end of the 2011-2012 tax year, so if you are looking for a reaction, look then.

But are tenants expecting rents to rise this year? If so we shouldn't we be rising them now?

Jon

[PC]

All but one of my rents have gone up.
And that one is going up when the time is up.

Just let a 3brm on the North Shore - rent up an extra $20pw and still plenty of enquiry.
Usually quite difficult to find tenants this time of year.

[unhinged]

I just let a 3 bdrm property in Whangarei last week, up $10.00 from 6 months ago. Letting a new house to my profolio in Whangarei tonight 4bdrm for another $25.00 more than the 3 bdrm. Both houses of similar age and condition in nice middle income areas.

[Rolf]

The impact of removing depreciation won't be felt until the non-appearance of the usual tax rebate at the end of the 2011-2012 tax year, so if you are looking for a reaction, look then.

If people wait for a tax refund then again they have no business nouse, to use TA's words. Much better to use the IR23BS form and get a special tax rate applied directly. Money in the hand now is always worth more.

[WGN ex-property manager]

I'll be writing to my tenants now, informing them that my costs have gone up by <X>, and reassuring them that their existing fixed term tenancy still holds good until it ends in Jan 2011.

In January I will be raising the rents when the robust student driven market means the market will bear a decent hike. The tenants will have already had 6 months to think about it and accept it, so will probably wear it and stay put. If they move I'll chase an even higher rent for a week or 2 to see what sticks.

[Rosco]

Clause in fixed term tenancy

I notice that some good property managers have a clause in their fixed term tenancies that they can increase rent due to tax changes, plus some other items that I can't quite remember.

Does anyone actually know of any property management companies using these clauses to up rent part way through a fixed term tenancy?