Rental property owners treated like second-class citizens

Louise Elliot says the rental market playing field is weighted too far in a tenant’s favour

IT should come as no surprise that rents are rising. When risk increases, the reward needs to rise too, and risks associated with being a rental owner are unfathomably high given the government can, whenever it sees fit, force a rental owner to house tenants who are not paying rent, while removing an owner’s fair rights to do anything about it.

To make matters worse, despite months of pleading, Minister Elise Archer is refusing to amend the unconditional moratorium legislation, which has knowingly been taken advantage of by unscrupulous bad egg tenants.

When reading that a tenant’s rent has increased by $100 a week it is natural to feel shock and concern. But without context, the full story is not known. Fundamental questions like when was their last rent increase and how does their new rate compare to other similar properties in the area should be addressed.

We cannot read the cover of a book and assume we know the twists and turns of the plot.

Large rises typically occur when rent has been unchanged for years, usually in recognition of a good tenant. Over time, the gap between what the tenant pays and the market rate widens. When that gap needs to close, it can be a shock.

The Tasmanian Residential Rental Property Owners Association recommends owners document with their tenant not only the rent that the tenant has to pay, but also the market rate to raise awareness of the difference.

Not only are rents rising organically as a major supply and demand imbalance drives

up prices, but rental owners are needing to factor in sky high land tax bills as new valuations roll out. (The worst on land tax is yet to come as Hobart and Launceston have not been revalued yet).

Many rental owners are owed rent and others have damage and mess to resolve. Landlord insurance is harder to come by and often has new exclusions. All of this factors into the risk/reward ratio.

Rental owners did not respond well to having their rights removed through the evictions and rental increase moratorium.

Calls by the Tenants Union of Tasmania for rent controls will mean that more rental owners leave the market, throw their hands into the air, and stop striving for financial independence — and instead hope a pension is still around when they need it.

Rent increases are one of the undesirable and avoidable legacy effects that the rental moratorium is leaving behind. We have houses empty, owners too scared that they may again be trapped with a non-paying tenant, free to wear, tear and damage. We have owners being more thorough and cautious than ever about who they allow to occupy their property so those without picture perfect incomes and histories will struggle even more.

Our association has been declaring the moratorium shortsighted for months. And, as expected, the moratorium that was rushed through in a panic to protect tenants from homelessness is backfiring and adding to rental stress.

Let us not go making a bad situation even worse by stripping a product owner’s fundamental right to set the price for their product.

Louise Elliot is president of the Tasmanian Residential Rental Property Owners Association and human resources specialist.