How tenants can prepare for rising rents

As rental vacancies hit record lows across the country opening up a landlord’s market from coast to coast, there are several things tenants can do to help even the score.

• More: How to nail your rental application

• Related: Property king anoints next boom suburbs

Australia’s cost of living crisis has been especially brutal for renters.

Unlike homeowners, who can turn a room into a holiday rental or refinance a mortgage, tenants have few options for managing their budget.

PropTrack’s Market Insight Report revealed the share of total properties listed for rent under $400 a week on realestate.com.au in February fell to 17.6 per cent, the lowest proportion since 2018.

The number of days rental homes are listed also hit a record low median of just 18 days nationally in March.

It’s a landlord’s market.

“Today’s renters are faced with limited choice, fierce competition, properties being leased at record speed and higher overall rents,” said Eleanor Creagh, senior economist at PropTrack.

To ride the rising tide, taking in a flatmate or asking your boss for a raise are the obvious choices but experts advise there are other moves renters can make to reduce the burden of a skyrocketing rental market.

KNOW YOUR RENTAL RIGHTS

Money expert with Finder, Richard Whitten, said it’s clear tenants are not in the driver’s seat.

“They’re in a really tough position because, it’s not a renter’s market, it’s a landlord’s market and it’s really hard to out-negotiate that,” he said.

For tenants in an existing lease, Mr Whitten said it pays to visit the tenant advocacy group in your state to not be taken advantage of with price hikes.

“Know your rights as a renter because some landlords and property managers will try to make an increase (or two) during a lease period. Unfortunately it happens all the time, like being hit with an increase in the middle of a contract, which, depending on where you live, probably isn’t legal.”

While the flexibility of subletting or taking on flatmates can depend on an individual lease, there could be innovative ways to earn a little “pocket money” while you’re renting.

“Even if it’s not part of the house itself, like a parking space or spare storage, there are different apps you could investigate and although it’s not a lot of money it could help some people.”

LANDLORDS LIKE LOYALTY

“Another good thing for renters to keep in mind is there’s value in being a long term, reliable tenant. Even in a tighter market where they could get someone in relatively quickly, it’s in a landlord’s best interest to have a consistent tenant so there’s not much vacancy,” Mr Whitten said.

“If a landlord or agent does hit you with a big rental increase, while it’s going to be hard to negotiate it away completely, there’s room to negotiate.

Sarah Elkordi, also known as The Rent Fairy, said negotiations aren’t impossible in the current market, but tenants should be prepared.

“Many people don’t allow enough time to have a conversation before the end of a lease. On average, the landlord has to give you about 60 days notice of a rent increase. So what I advise is around three months prior to your lease expiring you send them an email,” she said.

“It could say something along the lines of ‘Hi Bob, my name is Sarah and I’m living at 123 Fake St. I wanted to reach out as my lease is coming to an end, we’ve really enjoyed living here and don’t see ourselves moving anytime soon. Could we please have an open discussion about re-signing a lease?’

“You point out that you understand in the current market rents are increasing, and you could either offer a small increase or offer to sign for another 12 months at the current price. Start the conversation early, that way if you do end up leaving you’ll have time on your side.”

Originally published as How tenants can prepare for rising rents