Willi79

Hi there,

We (young family) are moving to Melbourne in Nov and are going to be renting for a least 5 years. My wife doesnt want to be moving around all the time so I am just wondering if you can fix rents for a long term deal? or is it best to ensure you get a place at the lower end of your budget so you can allow for increases. Does anyone know how often the landlords increase the rent and is there an average percentage increase?

Also is it worth trying to haggle a bit on the price per week? We have previously done this here in the UK but not sure how it works down under.

All thoughts and comments appreciated.

Cheers

NickyC

I'm a landlord in Sydney, not Melbourne but it's probably not much different.
We always have 1 year leases with a rent review at the end of the term. The rent is not always raised - it depends on the current financial climate and other rents in the area. If we have a good tenant we might not raise the rent at all - even though we could get away with it.

We've had one period when we dropped the rent to get a tenant (long time ago now) and we've had several periods where the rent stayed the same. The last few years rentals have been in short supply around here so the rent had gone up $10-$20 a week each time.

I'd be very wary of locking yourself into a long lease immediately. You might hate the place after a few weeks - or your plans might change and you need to move elsewhere. What I would suggest is take a place for 6 months. Then if you decide you want to stay long-term try to negotiate a new rent for a new lease. Most landlords would prefer a good long-term tenant at a slightly lower rent than a change-over every 6-12 months. It's costly to replace tenants in more ways than one.

PMV

Agree with previous poster about not tying yourself to a 5 year lease ... it could be very expensive to break if you needed to (and there are a zillion reasons why you would need to break the lease!). It is common to roll your lease from year to year (so you won't have to keep moving) with a small increase in rent.

I have rented 2 separate properties in Melbourne (2008 and 2011), and I negotiated a lower rent on both. Both were new builds, and the quoted price was out of sync with similar properties in the area. But from speaking to friends/colleagues - it's unsual to get a lower rent, and you can only negotiate down if the property is overpriced to being with.

So it will depend on your budget, requirements and the location you want. If you can do some research on how long rental properties are on the market, which ones are being snapped up straight away and the price similar properties are going for, then you should have a good idea of what rent you should be paying.

Willi79

Brilliant - Thank you very much, That has really helped me, esp about seeing how long the property has been on the market and what other similar local rents are going for - I wouldn't have thought to look into that!

And hopefully Nicky you might be right with regards to rent increase, we can cope if it is a smallish amount yearly.

Cheers, Paul

kew100

Hi there,

Congrats on your moving to Melb! I'm half Brit/half Aussie - born in Melb but have also lived for over 10 years in the UK. Melbourne is a beautiful city. I hope you love it! As a landlord of a property in Melb i know that it is possible to make a deal that suits both parties. My house in Sandringham (bayside, by the beach) is registered with a real estate agent who property manages it. Clearly they try their best to get a good contract sorted that suits both parties. As an aside, it's just about to come up for rental again in Nov if you are interested. The most important thing is that you need to be happy that the contract suits your own personal requirements. It really depends how flexible the landlord is. Some will only want a 1 year term signed, others will be happier with a longer period. I probably would suggest not locking yourself in for 5 years as maybe your circumstances might change in this time. Re rent increases - Landlords are permitted to do a 'rent review' once a year and increase the rent at this time, giving the tenants notification. If I have had good tenants however I have often not done this, as my belief is that its better to have great people in your place, looking after it, calling it 'their home', then going for some rent increase.

In any case, hope this helps a bit. Happy to discuss further if you need.
Cheers
Kate

EasyTyler

Congrats on opting for Melbourne. I do love Sydney but I'm happy here.

In the summertime we had huge problems getting a place because of the competition - we were about to resort to haggling UP until persistence paid off.

Right now however rentals are in good supply so demand is lower (and quite possibly worth a haggle). We managed to get a new, bigger place, opted to move in in two weeks as opposed to right away and we even had things replaced/renewed before doing so.

It's quite a different market over here so consider a few things:

Renting is expensive - the two of you may have to spend at least 2k a month (And I say MAY, could be a lot more more could be less) over 5 years that (reaches for a calculator)...is.... a shed load of cash in anyone's bank book.

Renting short term here will allow you to find your feet and a place to settle - how much would it suck to hate where you land, be burgled in the first week etc and have to stick around on a long term contract?

IF you have any capital then again the short term let is ideal and you can sink the cash into a mortgage - think what might happen if there's an economic meltdown (oh wait... have you seen the stock market) and maybe house prices start to fall (here's wishing)....

I've lived in another country before living here, and in three years there I lived in 3 properties in 2 locations - I was lucky that I chose the first location, but I still wanted to see what it was like elsewhere.

Living closer to one city is not the same as living close to another; especially one as large as Melbourne. All this comes from someone who lived in London for 8 years too; Melbourne is vast, vibrant, eclectic and expensive. I wouldn't have picked where I'm living had it not been for my aussie other half.... don't rush your choice of suburb.

Good luck!

Petals

The closer to the Central Business District you live in Melbourne the more expensive rentals. Landlords do not go for long term rentals mainly I believe because if they want to sell the new owner may want to live in the property and therefore makes a property more saleable to have sitting tenant but prospect of being able to move in.

The new housing tends to be out on the fringes and about an hour by transport from the CBD. Areas like Point Cook,Berwick, Cranbourne, Lyndhurst and Mornington are popular with Brits as the housing is new and they get an ensuite and all mod cons. New houses are insulated and have heating and cooling.

There is pressure on rentals in Melbourne as we take so many migrants here that there are many people looking at the good rentals at viewings. A lot offer six months rent in advance to secure a good one here when coming from overseas. Doubt whether you would be able to knock them down on the rent unless the property was average and undesirable.

Once you know where you want to live then you can look on realestate.com.au and see what rentals are around. Have a look at the Metlink transport site and follow the transport links from the city as its good to live near good transport.

I used to live in Caulfield and it took me an hour to get to work on the tram to the CBD and Caulfield is not that far out. The train from Frankston or Berwick takes an hour as they have expresses in the morning and evening peak.

Good luck

EasyTyler

...and while I think of it:

if I was arriving now, I'd bring extra Trainers, Brand new cookware, bed linen and inexpensive clothes... but in contrast, if you're you're into the latest labels/trends consider the price of these is more than double what it is at home:

SuperDry
Le Cruiset
Bodium
Zara

PMV

Have to disagree. I negotiated a discount on two properties that were overpriced to begin with. Both properties were brand spanking new with great finish and amenties in central locations .. and more towards the upper end of the market.

When properties are priced highly to begin with, they get less people viewing and then you are more likely to be able to negotiate a reduction.

Agree that properties in the mid-range may be less negotiatable as that is where the bulk of the market is.

But research is the key so you can find out what similar properties are going for

Willi79

Thanks Kate - I,ll PM you regarding this :-)

Willi79

Thanks everyone this has been helpful and given me food for thought, eps your comment PMV about looking at slightly higher priced properties and seeing if we can get a reduction.

I dont think I made myself clear in my first post, I def wouldn't sign up for a 5 year rental contract. What I mean is - my wife has really moved a lot in her life and wants to be settled. So hopefully fingers crossed if we are lucky enough (and do a lot of research) to get a lovely house in the right area for us, then we would like to stay for a longer term than six months or a year until we buy. This could take a while for us to have the funds.

I know this can happen, I've lived in properties for years in the UK and I have also lived in properties where the landlord has put the rent up a lot every six months or every year. What I dont want to do is find the perfect place and then have to move out pretty soon as we have had a huge rent increase and we cant afford to live their if its going to be a regular thing. Thats what I was trying to get at, hope that makes sense. Youve all helped to answer my question tho. Basically pretty much the same as the UK - do your research and ask the landlord/agents their general protocols regarding rent increases etc.

We both travelled Aus back when we were young free and single and lived in Melbourne for 9 months, so we have a pretty good idea of the suburbs etc. However, I wasn't looking at Melbourne as a family man then! We have booked temp accommodation for 3 months so we should have enough time to find the right rental and suburb hopefully in this time. Thanks tho everyone youve given some great tips.

Petals

Fine if you are looking at the top end but most people are not and I worked in legal and did not have any altruistic clients lol.

PMV

Our landlords have not been altrustic, just they were chancing their arm with an overpriced rental in a booming market.

When a property is sitting on the market for more than a few weeks, landlords will (almost without fail) consider a lower option from a good(/any!) tenant. As a landlord I have also dropped my asking rent to get a tenant rather than have it empty. The mortgage still has to be paid when it's empty, so it's better to have some contribution than none.

I also know of a friends mid-range place in Melb that was on the rental market after he moved out in Mar, his rent had been $440 pw, but it went on the market at $495 pw. We were keeping an eye on domain, and over the next 2 months, there were 3 decreases until at $440 (i.e. what is was only worth) it was rented.

So if a property is over priced, then you can negotiate, and I have proven that twice over. But you do have to be prepared for a property you want being snapped up by someone willing to pay the price. So it's a balancing act .. and research of rental prices is the key .. know the value of what you are viewing.