The vacancy rate for rental property in metropolitan Perth has lifted from a tight 1.9 per cent towards the end of last year to around 3.2 per currently.
There are now more than 4,000 rental properties on the market giving tenants a lot more choice with location and price. This is a big turn-around in the rental market in just six months.
The median rent is now around $480 per week, which typically means that houses are renting for around $480 and units, apartments and villas for around $455 per week.
However, with stock levels in Perth now above average many current tenants are looking to break their fixed-term leases and move to something else that might be more affordable or in a more suitable location.
Other tenants are keen to leave the rental system and buy their first home, especially now that prices have stabilised and interest rates are low.Either way, it’s important that tenants understand the possible costs involved in a break-lease and to do their sums before making any quick decisions. For some tenants it might be better to serve out the existing lease and leave at the end of that.
It’s important for tenants to understand that a lease is essentially a contract between two parties and leaving the premises before the agreed termination date is a breach of that contract.Under the Residential Tenancies Act, the owner is entitled to be ‘no worse off’ as a result of any breach by the tenant. As such, they can claim from the tenant any cost that might be incurred, such as rent until the premises are re-let, advertising for a new tenant and any unused portion of the letting fee.
These costs might add up to a few hundred or few thousand dollars depending on the circumstances.
Most property owners will try to be reasonable in these situations and some might agree to a no cost break-lease up to the point where new tenants move in. Even so, there may be some costs to you so check it out firstly.
If you are looking to buy your first home and do away with renting, it’s best to aim for the settlement date of your purchase to coincide with the end of your rental lease to save you money.If you are thinking of breaking your lease, it’s highly advisable that you talk to the property manager about the potential cost of that so you can make a considered decision about the best time to move and how that might impact your budget.
There can be understandable reasons for breaking a lease but it’s not something that should be done without thinking it through.