Tuesday, June 02, 2009

Rental

Are we rich types because we have a modest flat that we rent out? Nope. It costs us money and we have been in possession for ten years . It is a negative cash flow. Its value has gone up quite nicely and will be quite helpful at some point when we cash it in.

Why did we buy it? At some point when we lived in Balaclava and after we had done a modest renovation of our house (it should have been knocked down and only the facade left), we strangely thought that we had a bit of excess money and we should buy an investment flat. I was bit unsure about the place we bought, it was quirky, but it hasn't done so badly. I think we could have done better if I insisted on the one in the leafy area of Charnwood Road rather than Hotham Street.

I have to confess here. We bought the flat to make money. It hasn't yet. We have to prop it up all the time. Poor dude pays a thousand a month and it still negative for us. I could not expect him to understand I am only a poor working class person.

I must be the evil landlord. Actually, we are pretty good landlords. If it breaks, we fix it. We have had some bad behaviour by tenants too. When the present tenant came along, he requested a few repairs, and we authorised them. We baulked at a repaint though. We didn't have the money and he should have checked before he signed up. What ever happened to landlords paying for the paint and the tenant doing the work?

While I know some landlords are bad and some rental companies are bad, this is not the case with us and much as I hate to say it, nor is our rental company, Shocking Stupid or some company that sounds like that.

But at the end of the day, we have this flat to make money, not to be a social security service. Are we exploiting the poor who can't afford to buy or offering a service for an average market price?

Written 17/04/09

13 comments:

  1. "Are we exploiting the poor who can't afford to buy or offering a service for an average market price?"

    That entirely depends on your own definitions of 'poor' and 'exploitation'. Just so long as you don't rent out to scum who piss off the neighbours, (like one certain landlord I could name...) it's okay in my book.

    ReplyDelete
  2. Oh good lord...with rents like that, I could never live there.

    I'm sure you're a fine landlord.

    ReplyDelete
  3. St Kilda East - I'm almost $1100 a month, but it's a great 2 bedroom job, so I can't complain! The only things I've had go have been repaired/replaced/unclogged right away. I've never demanded anything as I can understand it can be a burden on the landlord. I might, however, ask for a security door for the balcony. This would be nice, especially during summer!

    In the end, if a place is decent and the rent fair, people will come and people will stay. The true indication of this is the duration of tenancy (Yes, other factors can influence this, but it's the best grade!).

    ReplyDelete
  4. Anonymous12:00 pm

    Too many people in Oz think they are going to make money from investment property sometime, but this is not true.

    This is what your bank told you to push for a mortgage.

    Most of real estate statistics these days says that aussie properties are the most overvalued in the world, just think about this and guess how long will it take for bubble to burst.

    ReplyDelete
  5. In NSW the Government is begging people with properties they don't live in to rent them out to help ease the current shortage in the rental market. You would be a hero up here!

    ReplyDelete
  6. We have only had one negative report Brian, one tenant riding her bicycle down the very long internal passageway to her front door.

    That is a pretty reasonable rental Rob. Long term tenants tend to get a very reasonable response if things are requested, beyond the necessary.

    Anon, its value has certainly increased. If we keep it, it will provide some income after retirement.

    Victor, hard to understand why anyone wouldn't. Pretty expensive to have a place empty.

    ReplyDelete
  7. Daisy, it is all relative to individual countries. 1,000 out of maybe 2,500 to 3,000 is not so bad to live in a fairly desirable area in a city of something like 4 million people.

    ReplyDelete
  8. you sound like a nice landlord. tho i couldnt afford 250 a week. Im just saying:)

    ReplyDelete
  9. I don't care what you try to say.

    I know you're a very evil landlord.

    But I adore you anyway.

    I'm wondering if you have one of those wicked evil landlord laughs.....

    ReplyDelete
  10. Hi Poet. When someone rents in a fairly expensive area, it is often easy to cut other costs such as owning a car etc. But against that of course, is people might go out more.

    Dina, rotting teeth, foetid breath and smelly old baggy suit completes the picture.

    ReplyDelete
  11. i want to rent a little cottage in the bush with an open fireplace and um, stuff. So that I can run away from the world for a bit!

    Our landlord/real estate agents are the biggest crooks in the world, though I suppose you get that in Brunswick. We've been here 2 years, we are pretty much perfect tenants, yet they eff us up the arse constantly! YAY!

    ReplyDelete
  12. It does seem like your LLs are pretty crook Fenz. Incompetent rather than malicious I guess.

    ReplyDelete
  13. oh no, they can be pretty malicious, trust me!

    ReplyDelete