As it gets harder for first homebuyers to step into the property market, many Aussies have begun looking to long-term renting. And thanks to a recent review of the Victorian Residential Tenancies Act, Victorian Premier, Daniel Andrews, has announced a new set of rules, designed to give renters more power and greater access to information.
One of the big wins is a ‘landlord blacklist’ - a public list of landlords and estate agents who have breached rentals laws or have had action taken against them in the past.
Rental bidding apps will be banned, along with offerings of higher than advertised weekly rent.
“The one in four Victorians that rent their home have for a long time been owed a much fairer deal, and we are going to give it to them,” Andrews said.
Landlords will be asked to speak up and inform prospective tenants if they have any plans to sell the property before leases are signed or if any asbestos has been found on the property. And if the rent is $760 a week or less, they will not be able to ask for a bond that is more than a month’s rent.
Another win for renters was the right to own a pet and while a landlord must still provide consent, they are only able to decline in specific circumstances. Previously, landlords were able to include a no pets rule in their rental agreement and according to the RSPCA, saw 15% of animals surrendered.
With so many hurdles on the road to property ownership, such as high house prices and the difficulty of saving a deposit, Aussie property hopefuls have had to get creative, leading to a rise in rentvesting - a strategy which involves purchasing a property in an affordable area, while renting in an area you’d like to live. In fact, according to a recent analysis by Mozo, rentvesting now accounts for over 30% of all property investments in Australia, which roughly amounts to $200 billion in loans.
Despite the new changes set to make life a little easier for Victorian renters, Aussies are reminded to consider all aspects of renting before moving into the market. You can check out our quick pro and con list below.
Pros of renting
Flexibility - Renting provides flexibility in location, as you have the option to relocate once your lease is up.
Maintenance - As a renter, you are not expected to pay for any maintenance or repairs required around the property - this is your landlord’s responsibility
Investment opportunities - Instead of saving for a deposit, you’ll be able to invest your money elsewhere. These other investments may pay off quicker than buying a home, which is generally a long-term investment.
Cons of renting
Ongoing cost - Typically, Aussies with a home loan can pay this off in less than 30 years, however as a renter, your rent payments will never stop. And once you hit retirement, you may struggle to come up with a large amount of money each month.
Inability to make changes - Unlike owning a home, you won't be able to make any serious changes in decor without permission from your landlord.
No control in rent fluctuations - One of the big problems with renting is that you have little control over rent increases due to inflation in the market. Of course, variable rate home loan repayments are also vulnerable to market changes. If you’re the kind of person who prefers to have an airtight financial plan, a fixed rate home loan might suit you best.