With Australian property values continuing to rise, buying a house is simply beyond the reach of many young professionals establishing a household. Although more than half of Australians continue to be homeowners, some analysts are saying that generation Y has a greater percentage of renters, and many of these will rent for their entire lives.
Then there’s inadequate superannuation, and that’s leading those who can afford it to buy houses for the sake of rental income. With these two generations, older and younger, seeming to have needs in common, why are longer leases so hard to get from Hobart landlords?
Uncertainty Makes Tenants and Hobart Landlords Waver
Whether you are a Hobart landlord or tenant, committing to a long lease is a big step. There are so many things that could change. A tenant might encounter the need to relocate before the lease is over, and unless he or she can find a new tenant that the landlord will accept, there’ll be costs and penalties for breaking the lease.
The landlord may also hesitate to opt for a long-term commitment. What if he or she decides to sell? What about rental increases? Will they keep pace with going market rates?
The Australian Housing and Urban Research Institute doesn’t have data for Tasmania, but it notes that in Queensland, the average tenancy for houses is just 15 months. Whether people are renting for life or not, the reality is that tenants generally don’t want long-term leases and insisting on one can hurt a landlord’s chance of getting tenants.
Taking the Middle Road
On the far end of the spectrum, we have monthly rental agreements. They can be problematic for both tenants and landlords. Landlords might find themselves with only the four-week notice period to find new tenants and maintain their income stream, while tenants have to be constantly aware that their lease might not be renewed next month or the one after that.
The costs of regularly turning over tenants extends beyond any hiatus in rental income. There’ll always be cleaning and maintenance jobs to do when you are between tenants and the more often you change tenants, the more frequently you’ll pay to get the property looking as good as new for the next ones. Incidentally, those thinking they’ll earn a fortune on AirBnB should also take this into account. Running a guest house is hard work, and there will be frequent expenses to cover.
Our advice to landlords is to choose a longer option unless they are only planning to rent the property out for a couple of months. Tenants who are planning to remain in Hobart for longer than just a month will also have greater security when offered a longer (but not too long) lease.
As property managers in Hobart, we’re the “jam in the sandwich” between tenants and landlords. We take care of both parties’ interests, and we do our best to find a perfect match between both the tenant’s and the landlord’s needs.
We strive to create a mutually beneficial arrangement in which the landlord’s expectations are fulfilled and the tenant’s needs are met. Talk to us about the rental property market in Hobart. Hobart landlords trust us, and their tenants love us.
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– Baxton Media.
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