Why a landlord has received no sympathy after selling his Melbourne apartment because of high interest rates

Australians have blasted a landlord after he complained he was forced to sell his investment property because the rent could not keep up with the high interest rates. 

Owen Wells, 73, had been renting out the two-bedroom apartment in Melbourne’s CBD for almost 20 years, but he said rising costs had led to him listing the property that was supposed to help fund his and his wife Helen’s retirement. 

But there was very little sympathy for the boomer couple after social activist Jordan van den Lamb, who goes by the handle Purple Pingers, shared the story. 

The ‘landlord realised he couldn’t get a renter to pay off his ENTIRE mortgage and had to pay some of it himself. Incredible stuff,’ he wrote on X. 

The sarcasm flowed thick and fast, with one commenter writing ‘Poor guy. Imagine having to pay for a house you are buying. Nightmare fuel.’

Another said: ‘Oh the poor darling. What a deep trauma. Thoughts and prayers.’

Others questioned the economics and basic maths of Mr Wells’ investment strategy. 

‘He bought the property 20 years ago,’ one wrote.

‘How much did he buy it for if his repayments are so high 20 years later. Has he not paid down any of his debt over the 20 years.’

Mr Wells said his mortgage repayments increased from $2,900 to $4,200 a month earlier this year.

He said when he bought the property two decades ago interest rates were reasonable and he had been getting good capital growth and rental income. 

But now with land tax, strata fees and much higher interest rates, the rent they were charging no longer covered the cost of running the apartment.

‘My cash flow, just from my interest (repayments) alone is going from $35,000 a year up to over $50,000 … so when I’m getting $36,000 a year in rental income, I’m just behind the eight ball,’ he told The Age.

He said on top of that he also had to pay rates and body corporate and agent costs, ‘so I have a negative cash flow’.

The cash rate is currently at a 12-year high and sits at 4.35 per cent. 

CoreLogic research director Tim Lawless said increased costs were deterring property investors in the state.

‘A lot of people are pointing towards the high taxation environment in Victoria as a disincentive for investment, which I think it is,’ he said.

‘You’ve also got the tenancy reforms, which are adding to costs in terms of getting [rental properties to] standard, and you’ve also got higher mortgage repayment costs, and part of that has been offset by some fairly strong rental growth, but it hasn’t been enough.’

Social media users slammed Mr Wells claiming he should have done more research. 

‘Imagine buying an investment property without understanding how interest rates work,’ one wrote.

‘Particularly in Melbourne which has the lowest rental yield in the country.’ 

‘Property investors should be required to pass a certification in the fundamentals of investment risk,’ another said. 

‘No other business would get away with … not managing their financial risk.’

Others questioned why Mr Wells only told part of his story. 

‘I notice he is quick to offer details of the costs but not so keen on providing the capital gain on selling this investment property he had for 20 years,’ one wrote. 

‘We’re expected to accept that affluent folk, the rent-seeking class, somehow achieved their success through merit,’ said another. 

A third wrote: ‘Do people do any research before they buy?’