Hi,
Just wondering how other people are passing on the added costs of the recent rises in Interest rates. Most of us would be paying an extra 1.5% or so since rates began their rapid rise about 18mths ago. This amounts to around 4.5k on a 300k loan which would need a rise of $90/wk to cover. I know that rents have been going up but is it feasible to pass on the extra costs to investors? I am sure that I wouldn't be able to pass on even 50% of the costs in such a short period. Guess I just have to absorb the extra costs and hope I can make it up in rising Capital gains.
I suppose it would be handy in this market to have short term leases to maximise the adjustments.
Ian
In Sydney rents are rapidly rising. But I think you can only charge what the market rate is, otherwise tenants will just move. If there is a huge shortage, then they don't have anywhere to go though!!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Ian Landy wrote:Just wondering how other people are passing on the added costs of the recent rises in Interest rates.Um, we aren't.
Where did you get the idea that you can do that?Ian Landy wrote:Guess I just have to absorb the extra costs and hope I can make it up in rising Capital gains.Yes, that's why we invest.
im thinking the tennants deserve to pay market rental
which may or may not be linked to your interest rates
if you want more for the same premises during a lease period you may have to consider giving them some thing
fridges, cable tv,and high speed internet spring to mind
after running a business during the eighties and paying 18 to 25 %
i fix my loans and it works for me
as i understand it the rate rises would increase my negative gearing so the government takes half the hit every time
that helps
cheersI look after my tennant well, cause i want them to look after my property well.. I recently install aircondition, automatic garage and exhause fans. I waited until lease expired then increase rent by $10 a week. Rate increase are unfortunate and its not fair if you pass it on to the tennant, you can get it back via negarive gearing..
cheers
Where did you get the idea that you can do that?
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