The Victorian government, led by Premier Jacinta Allan, has introduced more than 100 rental reforms in recent years. Pictures: NewsWire/David Crosling.
Although Ute and Eckhardt Mueller have put decades of hard work into building up their investment properties, they’re now selling up.
Victorian government policies which have resulted in rising costs for upgrading and maintaining rental homes have destroyed the couple’s long-held hopes that being landlords would help supplement their income in retirement.
In the 1990s, the Muellers started investing, often building the homes in Melbourne’s northern suburbs.
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The now-retired wife and husband have just sold a Craigieburn investment home – and they’re looking to farewell more in the future.
“We were certainly hoping that we could live off the rental income, but with the expenses that we have that’s not viable for us,” Ms Mueller said.
“It’s very sad to think that my husband and I worked pretty hard all our lives to create what we’ve done, thinking that we want to enjoy our retirement.
“But the government wants more and more money, it’s just incredible.”
While she’s not sure what exactly the Australian government’s potential CGT changes could entail, it’s unlikely to change her and her husband’s plans to gradually downsize their investment properties.
“We’ve always kept our rental properties at the lower rental rate because I really felt horrible for some families to pay out such large amounts in rent,” Ms Mueller added.
Ute and Eckhardt Mueller have sold an investment property in Craigieburn. Picture: Josie Hayden
However, the rising costs of ownership mean they’ve been unable to hold off putting up rents altogether.
The couple have also been scarred by a previous tenant who damaged one of their rentals so badly that it cost them more than $10,000 to bring it back up to scratch.
“There were holes in the wall, there was rubbish everywhere, the sink had a hole in it, tiles had holes on them, a tap half broken off the sink, and there was writing on the wall,” Ms Mueller said.
Many long-term investors have sold up in Melbourne’s northern suburbs. Picture: NCA NewsWire/David Crosling.
Ray White Craigieburn’s Trish Orrico said a lot of investors, especially long-term investors, had sold their properties in and around the area during the last 12 months.
Ms Orrico attributed this exodus to the Victorian government’s increased land tax and the cost of updating residences to comply with ongoing rental reforms, which could top tens of thousands of dollars for some landlords.
“They’re just selling up because they’ve had enough and they’ll reinvest that money but sadly they won’t do it in the state of Victoria,” she said.
She noted it was important for renters to live in safe and up-to-date homes but that under law, investors could not simply increase rents whenever they wanted to cover home modernisation expenses.
Ms Orrico said that “like night follows day,” CGT changes would likely cause even more investors to sell up.
She’s also worried that despite a recent surge in interstate-based investors buying in Melbourne, many will sell up in a few years once they realise the extent of the state’s taxes and reforms.
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