Money

Spending Shakedown – Rent

Published on December 11, 2018 6:10 am, by

Rent is often a large chunk of people’s take-home pay. Will you downgrade your lifestyle to save? And if the answer is yes, what will you sacrifice?

  • Will you move further away from the city?
  • Will you move to a smaller place?
  • Are you in a position to move into a share house for a period of time?
  • Would you go to something older or not as well maintained?

Other things to think about –

  • Will the cost of your public transport increase as the result of a move? Make sure you factor that into your calculations
  • If you move to something smaller or a share-house situation will bills lower? Include that in your calculations as well

If you are uncertain, think about the money and saving $200 per week on rent, that’s $10,400 in one year!

Rent

Mostly rent expenses are subject to your lease agreement. There are two times that it’s best to drive down your rent payments. These are when you take out a lease agreement on a new property or when your lease is up for renewal.

Right now if you are currently in hardship and finding your rent difficult to pay due to loss of income due to COVID-19 there is a range of measures in place to help you. Read more here.

Taking out a new lease

Once you have decided what you’re looking for, it’s about getting the most value for your money. And the only way you can know if you have that is by doing some research will help you decide whether to pay the asking price or whether to offer a lower than advertised amount.

The things you should find out –

  • How long has the property been on the rental market?
  • What are other similar properties renting for in the area?

Your landlord may consider some other things that may help make you an attractive tenant –

  • Your family status
  • Your income
  • Whether you have pets

It’s also worth asking some questions about the landlord. Do they have any plans to move into the property, sell the property, or are they looking for long term tenants? If what you’re looking for matches what they’re looking for this may put you in a stronger position.

Negotiation tactics at lease rollover time –

  • Now that you’ve been in the property for a while, if you’ve done everything right, chances are the landlord would like to keep you
  • Make sure you look around at other properties on the market
  • If the landlord wants to increase the rent is it fair or are other similar properties renting for less?
  • Make sure you know the cost of moving and don’t be afraid to share it with the property manager if you’re going to be better off
  • Remember the property probably be vacant for 1 to 4 weeks at tenant changeover – they may forgo an increase so they don’t have a vacancy period

At the end of your lease agreement:

Things to remember:

  • Review the cost of moving, if you’re looking for somewhere less expensive make sure that the new amount you’re paying added to the moving costs are not more than your current rent
  • If you move chances are the property will be vacant for a week or two, sometimes more and your landlord may be willing to negotiate. If you’re happy in the property, try to negotiate, your landlord may be willing to accept slightly less to keep the property tenanted

Bond

Bond is generally a maximum of 4 weeks of rental payments. In some states, you will need to negotiate over a certain weekly rent amount.

In the following states bond is a maximum of 4 times your weekly rental amount

  • New South Wales
  • Tasmania
  • Northern Territory
  • Australian Capital Territory

There are some variations in the other states –

  • Victoria – Max 4 weeks rent if the weekly rent is $350 or under. Where the weekly rent is above $350, the bond is subject to negotiation between you and the property manager or landlord
  • Queensland – Max 4 weeks rent if the weekly rent is under $700. For $700 or more there is no maximum amount, the bond is negotiated between you and the property manager or landlord
  • Western Australia – Max 4 weeks rent if the weekly rent is under $1,200. For $1,200 or more the bond is negotiated between you and the property manager or landlord. A pet bond, max $260 can be requested if the weekly rent is more than $1,200 and the pet is not an assistance dog
  • South Australia – Max 4 weeks if the weekly rent is $250 or under. Max 6 weeks if the weekly rent is over $250

 

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Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.

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