I inherited a tenant with a recent property purchase. She is a single mum with a couple of kids. Lease until Christmas but her contract states she is due for a rent review.
She has already told me she will be leaving at the end of the tenency to look for a cheaper house due to budget restraints.
She currently pays $230/week
The area and similar houses attrack $240 – $260/week.
I plan to do some renovations at the end of the year and so will have to ask to leave anyway.
What would you do?
a) Increase rent now after all it should be a business decision. She might be telling a tale to keep the rent low.
b) Up the rent nomatter. Put emotion aside.
Forgive my spelling. I do mean Conscious.
No right or wrong here. You have to feel comfortable within yourself. For me it is a business so I will increase rents if they are fair. In this case I would maybe come up on the rent and offer to improve the property for the tenant. Maybe fans, A/C, etc may make the tenants life more bearable and then the rent hike is not for money’s sake but an improvement in the property. Explain that the oprice rise has to happen but you are willing to imrpove the property up to a value for the invcrease. Eg.rent goes up $10/week you might put fans in four-five rooms.
The other side is waying up if the tenant is worth the lesser money because of their solidity. Good tenant needs special care. Still I would do the improvement thing.
Hope this helps.Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Hi PG-WA
“What would I do???”
Just been through a similar situation myself with one of my tenants. Decided to leave the rent the same as this particular lady has three kids (single mum) and I felt it was my way of helping her and the kids through a difficult time (just been through a divorce)
She has just recently moved on and when she left she thanked me for everything I had done to help her. I didn’t feel as though I had done anything special except probably provide a bit of stability for her family while they got back on their feet. Due to the relationship I built up with her she will probably do a wrap with me when she feels a little more comfortable with her situation. I hope all my future relationships with my tenants/wrap buyers turn out like this. It’s a very rewarding feeling (warm amd fuzzy)
Take care
Dave [
]my tenant is also a single mum and great tenant, I decided not to increase rent to encourage her to stay on.
This decision can be both compassionate AND good sense business wise. If she decided to move I would have to find an equally good tenant and a vacancy period of two or more weeks would cost me more than I would gain from a small increase in the rent. Perth has a glut of rentals in the recently invested in areas so tenants can be choosy.
I’ve been a single mum and I certainly appreciated understanding landlords
Perhaps you can have a win win situation by increasing the rent once the renovations are done.
David Femia
Femia Property Group
Property Investment Consultants
http://www.femiapropertygroup.com.auPls follow your conscious. She already told you she couldn’t afford the current rent. If you increase the rent what would you expect her to do? She could not even move out until the lease ends at Xmas. [
] Huey[
]
Does she look after your property?
Is the place neat and tidy?
Does she do any gardening?
Does she expect that renovations are necessary?
Ask her if there was one thing she would like done to the property, what would it be and would she contemplate a small rent rise?
I know that this sounds like pandering to the tenant, but good tenants are gems. We inherited a tenant with a property eight years ago and are looking to knock the place down in two years and build two dwellings. We are looking for another place to relocate out tenant during the building, then he will move back in. He maintains an immaculate garden and fixes the small things that go wrong. We do not use a RE agent and he is 1600km away. He is almost part of the family.
And the rent – he pays below the average rent for the area, but he’s solid, reliable and long term. This still makes it a positive cashflow property. It’s the best of both worlds.[]I have just gone through a similar thing.
Let me paint a picture for you.
Single mum 18, and has a baby 1 year old. She had to move out of home because she was pregnant. She has been renting my unit for 1 year now to the day, and her lease had expired 6 months ago. She is a really good tenant pays her rent on time and never has a complaint.
I have wanted to do some renos on it for the past year and also increase the rent for me to do this she had to move out. After attending the master’s seminar I realised that I could make this a win win situation. So here is what I did.
I went around to see she and introduced myself to her, as we had never met before.
My wife and I chatted with her for a bit about her life and how she was going raising a child on her own.
I then told her that we wanted to some renos on the unit and for this to happen she would need to leave the unit and her furniture had to go as well.
She wanted to stay in the unit as it was in walking distance to her mother’s house and shops.
I told her that I arrange for a removalist to come and collect her stuff and we would put it all in storage for her at our cost and she would not have to pay any rent. She would need to find a place to stay for the next 4 weeks.
She agreed.
We then told her what the renos would be and if there was anything else that could be done to improve the unit for her. She offered some ideas.
In walking into the bathroom to inspect a new skylight we had installed I saw in the bottom of the shower was a plastic baby bath. I asked her if her baby liked to play in the bath, she told me that he loved to but there was not a fixed bath big enough for him. I said that we would try to get a bath put in for him.
By this time our conversation was drawing to a close and I have not said anything about the rent going up. I did not want to increase the rent I just wanted to help her out. But I had to push the emotions aside and increase it.
I told her that to do all this would increase the rent by $10pw and her response could not have been better she said ” I will pay anything so my son can play in the bath”
She also wanted to now after that if she could sign a 12-month lease.
My advice to you, listen to your heart after all you are the one that has to live with it.
Shane
Hi PG-WA,
Always find a need and negotiate win win, it cant and shouldnt be one sided. If you can find win win how does anyone loose.
regards
JohnDHi PG WA, as usual, this site blows me away with the wisdom and generosity of spirit of the contributors. They are giving really good advice I think.
I think you have to give 2 months notice anyway for the rent increase to take effect…we do here in QLd I’ve just found out…?
I think the best advice is to go and see her, have a chat, tell her you want to do reno at end of year, ask HER what would make her stay at the unit, what it needs, it will help YOU plan your reno, have a chat, see what she would need to stay, or she might not be that fabulous, but it’s good to leave on good terms, for both of you, and maybe your time together is up, and you need another tenant who can afford to pay $30/wk more…
we have just given one of our tenants notice of a $10/wk rent rise (no increase for 3 years!) because they are ‘stable’ and pay on time, but the house is a brothel, ie a total filthy mess, they are SHOCKING tenants in terms of caring for the property, but nice people, not ‘wreckers’, just really dirty and messy, but…they always pay the rent on time and we’ve been too busy to address it…now we think the time has come…they’ve said they will leave if we increase the rent…and we’ve decided ….that’s the way it might just have to be. The house is rented probably $20/wk below market, and we’ve only raised the rent $10/wk, but if they go, well, it’s sad, we lose a ‘regular’ payment, but hopefully we can CLEAN the property, it SO needs it, and polish it up, and get someone who is happy to pay ‘market’ and hopefully who keeps it in a better state of cleanliness…we don’t ‘need’ the $10/wk extra rent as such, I just think …it’s time…they have stable jobs so it’s not like we’re ‘kicking’ the poor and I can live with their ‘outrage’ if we raise the rent after they’ve had it pretty good for a while – unfortunately, I doubt they will leave, they are paying less for better facilities than they will find in the same area, but if they do…
good luck with your dilemma.
kooringal
I inherited a tenant with a recent property purchase. She is a single mum with a couple of kids. Lease until Christmas but her contract states she is due for a rent review.She has already told me she will be leaving at the end of the tenency to look for a cheaper house due to budget restraints.
She currently pays $230/week
The area and similar houses attrack $240 – $260/week.
I plan to do some renovations at the end of the year and so will have to ask to leave anyway.
What would you do?
a) Increase rent now after all it should be a business decision. She might be telling a tale to keep the rent low.
b) Up the rent nomatter. Put emotion aside.
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