my partners tenant has come to the end of his lease (6mths) and wants to go to periodical payments, meaning he can leave or we can ask him to leave after 21days notice.
her PM had talked her into thinking this was OK, i’m however against it as i like the security of knowing the tenants “fixed” into a rental period and no ‘suprises’ come at a bad time financially.
What thoughts do you all have as my partner doesn’t seem too concerned??
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Hi Redwing,
This situation may most likely affect your insurance and you may not be covered if anything happens. If the tenant definitely wants this situation then negotiate a higher rent on the grounds that the rent is discounted for long term tenants or the tenant pays 2 months in advance. The tenant asking about this is probably thinking of moving and you may want to advertise privately and see how many people reply just for the exercise. Also you may find someone wanting to sign a long lease and put this in the advertsiement. If you get a good response then you know that if the tenant leaves you shouldn’t have to many problems finding a new one. The PM may have another property ear marked for your tenant and is going to double dip on the situation.
C2
“Is it true the more you owe the more you grow until the bank steps in?”C2
have landlords insurance on our rentals- is this what you mean by “affect your insurance” ?
i feel the same as you- if he’s not interested in signing up for a 6-12 month lease he must have other plans.
i also mentioned to her that for the risk we should increase the rent- but i like the way you put it better. The two month in advance may be an idea too, currently tenant pays $145p/wk and has just come off or nearing i think end of 6month lease. being x-mas time cant see him moving straight away-but you never know huh
The property is in a good area and pristine i’m confident it’d rent quickly if he left, but you never gain on any rent you loose in the transition period!
REDWING“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Yes, i was refering to LI. If the tenant gives 21 days noticed I wouldn’t expect any vacancies longer than 2 days before the next tenant moves in. This is enough time to get the handyman and cleaners to do their jobs before the next tenants move in and who should already be lined up and waiting to move in. Wrong about xmas time it is amazing what some people will do with the extra money ,holiday pay and a 17.5% bonus, they receive. Also it’s the time to move without taking time off work, because they’re already on holiday. It is also possible to get the cleaners and handyman to come in before the tenant leaves. Offer a 10-20% discount on the last week of the tenants agreement to have this done.
C2
“Is it true the more you owe the more you grow until the bank steps in?”C2
If you were to up the rent then what would be a fair and honest rise from $145p/wk seeing as how the ‘safety-net’ of having a fixed rental agreement is gone?
i’ll have to check re; the landlords insurance but it’s definetly food for thought as the rental conditions are now a bit more volatile aren’t they.
I’ll have to speak to the PM 2mw and raise some of these issues..
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Can someone please explain what is the problem regarding landlord insurance if your tenants are no longer on a fixed term lease? How does that make any difference?
My tenants are also asking to go onto a month by month basis once their lease expires.
Thanks.
Namasté
Hi Redwing,
There seems to be a difference between the states.
Our property manager in Qld changed from one LL insurer to another because the cover wasn’t there unless tenants were on a fixed lease. We also have a holiday unit for which we took out LL insurance with no problem.But then I certainly would not agree to anybody going into one of our properties without a lease – if their name isn’t on a lease, they wouldn’t be responsible for the property and who wants short term tenants with one weeks rent and lease fee coming out of rental income each time.
We have had tenants in a house (NSW) for over 2 years, They initially signed a 12 month lease and now they are on a week to week since that expired. They have to give 3 weeks notice of vacating or we have to give them 60 days. Our property manager says we are covered.
Anna
By short term tenants, I mean a 3 month lease which happened with one of our of our units. At least it was occupied and she paid bond.
Namaste, hope the above post explained a bit but ring an insurer and enquire.
Redwing, maybe $5 a week increase is OK if they aren’t on a fixed lease any more. I’ve heard of a tenant being happy to pay $5 extra to have a small dog!!
Anna
redwing, check the tenancy rules in your state. I know in ACT that if we have ‘no reason’ to ask the tenant to leave, we give them 6 MONTHS notice. If we or a family member wants to move in, or we want to renovate, we have to give them 2 months notice.
They only have to give us the 21 days, but it’s a heck of a lot harder for us to get them out that quickly.
Cheers
MelRedwing,
If you want to increase by 5 then ask for 10 negotiate down. If 10 then ask for 20. You may want to find out what other similar units/houses are renting for and then decide. You may find a 10-15% increase is fair if the tenant wants a short lease. I still think it’s better to find someone for long term if your plan is buy and hold.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Redwing,
Ah so !! .. we all want to be Landlords, but only when it suits us right? It’s a two way street. Your tenant has ended a 6 month lease. That is the end of his commitment, else he would have been signed up for longer. Your tenant would also want security of tenure, it has served his purpose. It is normal practice to follow on month by month. I’m with your partner, relax will ya, it’s all part of the game.
Old Chinese Proverb .. “Another tenant will arrive when the property is ready”.
Kind regards, Phil
They only have to give us the 21 days, but it’s a heck of a lot harder for us to get them out that quickly.And with good reason… it’s typically harder (and takes longer) to find a new place to move into than it does for the landlord to find a tenant.
kkowalsk I disagree. What if the market is over supplied? There are 20 places for them to choose from. You know that they’re going to leave within a short period of time, but you don’t know exactly when.
You have a tenant that wants the place within a month, for 12 months, but if they can’t have it, they’ll go somewhere they can, and you’re left with one of the 20 places now vacant.
My brother has just applied for and been offered two properties within the past week. He’s currently unemployed. One was OK, and would have accepted a 6 month lease when pushed (they’ve now dropped the rent by a further $10 per week as my brother didn’t take it). The second place (he only applied for the two) wanted my folks to go guarantor, which they did. Three days after application, he’s moved in.
Cheers
Mel
kkowalsk I disagree. What if the market is over supplied?It was your choice to invest in real estate, that is one of the risks you bear.
It’s not really any different than someone that moves into a flightpath, then complains about the noise.
The system is designed largely to protect the tennant, because from my own experience, the landlord seldom does anything for the tennant out of the goodness of their heart.
Hmmm..
i never relax, always thinking[
]Anyway spoke to property manager who called tenant, he’s happy with the place was happy to sign up for another 6months!
Gives us peace of mind-no nasty suprises, and gives him peace of mind i suppose-no rent increase for next 6months also.
periodic conditions here were he had to give us 21 days notice and i think it was 30 days for us.
i like the peace of mind a fixed period gives you- there’s no certainties or Guarantees in life but it always pays to be careful huh [
]Thanks to C2 and all for your input
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Yay redwing. what a simple solution!!!
And yes kkowalsk it was my decision to invest, and I’m being proactive in attracting tenants, which is why I want them to sign a lease. It is no different to the peace of mind one can get from fixing part of the interest rate. I’m sorry that it appears all your landlords have been b#&*@rds, but I look after mine. Why is it that you are looking at this site again?
Cheers
MelOur tenants recently signed a 12 month lease. At that stage we had no intention of selling the property. About four months later we decided to sell but realised that we could only do so if the new owner will honour the remaining term on the 12 month lease – in other words, we had to sell the house with the tenants, hence cutting our market to investors only. As far as I know, there is no way to terminate a fixed tern contract. So in that sense, if you have any plans to sell the property, I would go with a periodic lease (month by month).
Hi Redwing,
I’m glad you are relaxed again, well done. One call and problem solved until May next year. So, if you have to give 30 days, are you going to offer it to him again at the end of April? If he declines, that gives you 30 days to find another tenant to minimise the vacancy period.
Hi Kkowalsk, I’d be more concerned about impact under a flight path as opposed to the noise. But your analogy isn’t too bad. As for landlords doing things out of the goodness of their heart, why the hell would you? That’s what a contract is for. An agreement. It’s business. Both parties know their respective responsibilities, so what’s the problem? Sure, the tenant has greater vacancy rights in regards to time. That’s because it takes time for a family to move. They also have the right to quiet enjoyment of the property. What of the investor who has taken a risk, provided a home and maintains the property?
Hi Anna, what was your cash on cash return for providing the dog to the tenant? LOL
Kind regards to all, Phil
Phil, I do a bit of casual work in property management and people often ask if they can have a pet. Most owners say no, but one offered to pay a little more rent.
Actually we have allowed a small dog in two of our rental houses. (no increase in rent though!!)
Keeps them happy and there are polished floors if the doggy happens to come inside, no fury carpet.
AnnaHi Anna,
You missed the joke. As in “happy to pay $5 extra for a small dog“. Did you install the dog next to the dishwasher?
Kind regards, Phil
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
