This weekend, I went to the auction of 49 Kepos Street – the last house I lived in before this one. At the time, moving into Kepos Street was a dream come true. It was like living on Sesame Street – the location was perfect, the house was cosy (if not a little damp and mould ridden) and better yet, my sister, Rachael, her partner, Marlon and their then-toddler-son lived just a few doors up.
We were exactly where we wanted to be until one day, the landlord put our rent up 20% which priced us out of the street. Incentives to buy were good at the time with mortgage repayments being equivalent to rents a little further out and so we made the leap and bought this house which I’m now trying to hang onto. Given everything that went down in this house though, I think of Kepos St as the last place Matthew and I were completely happy. Even then, for things to be the way they are now, it can only mean that they couldn’t have been as happy as I must have imagined them to be then. But that thought is just too sad and only leads me back down a long, dark road to nowhere. Instead, I’ll do my best to be grateful that, as I experienced them, they were very happy times.
What I find interesting in terms of my onward journey though is that Kepos St went on the market just as I started doing my homework in ernest for keeping this house. I found out it was for sale when another of my sisters, Bec, called to say she drove past and saw the sign. What’s odd about that is that it’s a cul de sac and she had no particular reason to be driving by it.
Coincidence and curiosity led me to look it up and call the Real Estate Agent. It was going for sale by auction and the ‘ballpark’ starting price was practically the same as the banks recent valuation of my own house. Of course, the starting point of an auction is always unrealistically low to get more bidders in and conversely, the bank has valued high on my house to enable me to maximise my borrowing capacity. Still, that the figures were the same was far too coincidental for me to not find it meaningful. I acknowledge that things only have the meaning we ascribe to them and that I could’ve just as easily written this off as coincidence but that’s not how I’m rolling these days.
So what could it mean? I knew straight off the bat that I wasn’t being offered a choice between houses. It’ll be one thing if I manage to hang onto this house by tinkering with an existing mortgage. It would be another thing entirely to sell up and buy something new – that’s just not an option for me right now or perhaps ever. Of course, if it was, obviously I’d choose… this house! Huh! There it was – the meaning I was looking for! As I started that thought, I never expected it to end that way. I felt for sure, if given a choice, I would pick Kepos St and yet the answer came clearly and confidently. Even when I questioned it as though I had misthought, there it was – my resolve that this is the house I want.
It’s a funny thing to catch yourself by surprise by simply affording a contemplative moment to eavesdrop on your own inner conversation. And that’s how I roll these days! None the less, I couldn’t resist going to have a sticky-beak during one of the open house sessions. My former Kepos St cohort, Rach, came to hold my hand. It was weird walking back in there, like trespassing on my own past. It looked so different inside, all freshly painted and dressed for sale but it was still the same place and each room was filled with a torrent of different memories and emotions. What made me saddest of all though was that I wasn’t able to share this trip down memory lane with Matthew, it should be possible and I’ll never understand why it isn’t. It’s only left to me to accept it.
That was over a week ago. On Saturday, I returned by myself for the auction. I had another poke around just because I could. I heard one of the very many people traipsing through say “I can’t believe I used to sleep on that floor!” and it made me smile to know I wasn’t the only Mrs Mangels* in the house. I also smiled to think that just as I had had my happy days here, so too had other people and in just a few moments, someone else’s story with 49 Kepos St was about to begin.
Bidding started at $700,000 and went up, up, up and up finally closing at $885,000. I hope for the buyers sake that the previous owner had done more than scrape back and paint over the damp damage… I suspect not.
And so onward with my mission to hang onto this house with an renewed certainty and commitment. My biggest challenge remains finding work to fit around my nephews hours at a rate of pay that will satisfy the bank. I did have a near-employment experience last week for which I owe a debt of gratitude to Amy. Thank you Amy! Although the opportunity passed me by as quickly as it arose, it definitely clarified for me firstly what I’m aiming for in terms of pay/hour and secondly, the fact that I’d really rather perform public service either through government, education system or a not for profit organisation. Still, beggars can’t be choosers so please bear me in mind if you hear of any such opportunities before the next auction I attend is of my own home!
*an iconic character from Australian soap opera, Neighbours whose name is synonymous with being interfering and nosy!
Patches McGee 
Your rent would have gone up from $470/w to $520/week. This is a 10.6% rise, not 20% as you stated. It wasn’t the property owner’s decision to put the rent up by $50/w. They didn’t even know it was done at the time… it was the property manager’s increase.
This wasn’t an unreasonable rent in the street at the time (and when you consider the addition space upstairs, very fair in the street context), though a $50 jump at one time was not warranted and unreasonable, I agree. Had the property owners known at the time, the increase would have been amended.
The same situation happened with the next tenants and the property owners stepped in and reduced the increase, making it clear to the managing firm that no rent increase was to be made before the property owners were specifically informed. Ask the last tenants… 😉
The last rental amount before the sale was $550, and this was only due to the fact that the tenants were very well liked by the property owners.
The rental “should” have been more like $580/$600 to meet the market expectation at the time.
After the auction, the property achieved a weekly rent of $650 I believe? though I can’t confirm that.
The mould issue in the kitchen and bathroom was comprehensively addressed with mould killer, a wash down and then a quality mould retardant Dulux paint. This was done while the last tenants were there. Ask them… 😉
Water ingress via poor older Australian guttering design was also addressed, and water membrane paint on the front common parapet walls were painted on the outside well before the auction.
Mortar cracking on the back common parapet wall was addressed with silicon filler.
While that section had been painted years previously, it would be beneficial to repaint with water membrane paint.
You can never have enough paint on these old houses… 😉
Rising damp/salt at the front door had been treated with waterproofing liquid, but it can take years for the “salt” problem to be fixed completely even if a new damp course “plastic” insertion was made. Just Google “rising damp”.
The complete replacement of the render could be done (and this was done by the next door neighbours), but this, as you can imagine, is much more involved than using water proofing liquids which are designed to simply soak into the bricks and mortar.
Worse case scenario, a scrape and paint every 2-3 years until the salt has leached out completely, which would take less than an hour to do.
Also consider that all these 140 year plus terrace houses have rising and falling damp/salt issues in their history because of the materials used at the time (the old bricks and the lime mortar acts like a sponge).
And then there was the effect of very wet weather at the time you were there after about 11 years of drought… 😉
Glad you enjoyed your stay at a property on a very special street which is permeated with so much character and community spirit..
Cheers…
Hi Peter,
Thank you for your very thorough and insightful feedback, you certainly know your stuff! The rent increase you mention was actually the second one over a very short time which quickly cumulated to 20% or thereabouts. Same thing happened to my sister up the road so we all moved. We let the owner know at the time but he didn’t intervene. I certainly appreciate the foibles of an old house, the place we all moved to is of a similar vintage with similar signs of old age (though luckily without the mould – it’s a tricky one to get rid of!). Over all though, I will always remember my time in Kepos Street as a golden age – it’s definitely a very special street.
Thanks again for you comments,
Naomi
You are welcome…
A bit more insight:
At the time of your second rental increase (do you recall what time frame you are talking about between your first and second?), there was a change of management that had a more aggressive rental philosophy. Previously, Maureen had a very gentle approach to property management even at the cost of reduced income for her due to reduced turnover of tenants. This did, however, erode the earnings/cost ratio over the years, and warranted a “catch-up” phase, imo.
Normally this happens with a new tenant event when tenants move on (it used to be a period of around 2 years but has increased).
The tenant change-over costs to the property owner is excessive and typically takes half a year to recoup if no new structural work is done, hence the desire to maintain longevity… 😉
Regarding rent increases:
As most of us know, there is an extreme shortage of housing in Sydney, pushing up rents, particularly in the last 5 years, to the point where some are encouraged to buy their own home ;P
And unfortunately, as a result of a first home owner market being extremely anemic, partly as a result of Barry’s focus on incentives for new house construction grants rather than existing, the CBD rental stress is increasing.
Also consider that increased rent rises are often a reflection of increasing costs, not the least being the excessive land tax that is being gouged out of property owners.
Then there are the ever increasing insurance costs, the new fire levy, much higher council and water rates and other integrated hidden overall costs such as the “carbon tax”. Maintenance costs aren’t going backwards even today with it’s looming unemployment threats on the horizon.
And don’t forget that just before the global financial crisis, interest rates rose very significantly due to the fledgling, inexperienced then new Reserve Bank Governor, Glenn Stevens, learning the ropes.
He push up interest rates by, what was it, 4%? in a very few months…
And then drop it by 4% overnight after some people fixed at the higher rate of 7-8% or more…
As a result, Glenn Stevens would not be on many people’s Christmas card list even these days… 😉
Some people fixed their mortgages at a relatively high level, driven by the fear of what this seemingly unpredictable individual was capable of at the time, despite it being only a month or two before a federal election (something virtually or maybe even actually unheard of in the history of Australian politics).
A lot of people had a very difficult time managing large mortgages that were liberally handed out up until the GFC…
FYI, it was this fiscal liberalism which created the American sub prime property market which kicked off the global monetary catastrophe…and many people globally were caught up in this irresponsibility not of their choosing.
As a consequence of many factors, the vacancy rates have substantively and perniciously fallen for those renting, and with this, the inevitable rise in rental remunerations for those possessing under performing property for many years (in terms of capital growth and holding costs).
The price at auction for 49 Kepos was a good one, but it wasn’t that much better than the high tide figure it would have achieved a number of years previously. In essence, it was mostly “catch-up”… 😉
The tide seems to have turned regarding property capital growth, even if it may be fragile at this time. I suggest you hang onto you new property firmly with both hands if possible, since the new property cycle seems to have begun, despite the fiscal irresponsibility of the dysfunctional federal government.
The people who bought 49 Kepos St Redfern will undoubtedly do very well in the mid to long term. Of this I am convinced… 😉
Cheers…