Are extended tenancies a good thing?

To provide greater security for landlords and tenants, the Victorian government has announced a new long-term tenancy agreement for leases of more than five years.

This change to the Residential Tenancies Act will be implemented in 2018, and will provide improved stability for renters, and a more steady income for rental property owners in Brunswick and the rest of the state.

Tenancy agreements are designed to protect both parties, landlords and tenants alike. While shorter agreements may sound safer for landlords worried about being stuck with unwanted tenants, the truth is that securing tenants for the long-term can actually be a good thing with the right property management.

Why long-term leases?

Currently, more than one in five renters have been living in their rental property for more than five years, according to the Victorian government, which is likely one of the reasons behind the change to the tenancy agreement. 

"There are 884,000 Victorians who rent, or own a rental property. This change will give renters the chance to put down roots and landlords a more certain income," Premier Daniel Andrews said in the VIC government media release.

"More than 25 per cent of Victorians rent. They should be able to have the security that comes with a long-term lease, and that's exactly what we're doing," said Minister for Consumer Affairs Marlene Kairouz. "This is about giving Victorian renters and landlords the security they need – the ability to lease a property long-term and a way to help renters find their future home." 

Who wants a long-term lease?

Currently rental agreements are capped at a maximum of five years by the 1997 Residential Tenancies Act.  The average renter stays in a home for 1.8 years, according to McCrindle Research, so you might be asking yourself, 'who wants to lock themselves into a long-term tenancy agreement?'

While students and young professionals typically may not want to stay in the same property for extended periods of times, not everyone is in the same boat. For example, families with school-aged children will be actively looking for stability, so that children aren't forced to switch schools every couple of years.

"Raising a family is stressful enough without worrying about whether you need to move every 12 months. Long-term leases will end that uncertainty," said Mr Andrews

If you own a rental property in Brunswick, Carlton or Coburg and would like to know more about what to expect from the changes to the Residential Tenancies Act, get in touch with the experts at Ray White Brunswick today.