All Topics / General Property / Setting Rents

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  • Profile photo of MalachiiMalachii
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    @malachii
    Join Date: 2003
    Post Count: 36

    Had an interesting experience during the week. We have new tenants moving into a property that we have just renovated. I had just read a book on negotiation which said “..the first person to mention a price always loses…” so I thought I would give it a test. When the tenant asked what was the rent I said “I haven’t decided yet. Why dont you go away and think about what you would be happy to pay for the place if I gave you a 2 year lease”. His offer (2 days later) was $230 per week which was $30 more than I was going to ask!!!! Anybody else ever tried this?

    Profile photo of yackyack
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    @yack
    Join Date: 2003
    Post Count: 1,206

    I did a course with work called “The seven Elements of Negoitation”

    I cant recall if it said “the first person to mention a price always loses”. One of the elements is to look at standards – in your case market rents.

    So obviously they had a higher value placed on the property than you or you did not do enough research to find the market rent for the area.

    Profile photo of JetstreamJetstream
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    @jetstream
    Join Date: 2003
    Post Count: 12

    Good on you Malachii!!

    Interesting concept. It proves that thinking outside the square works!

    I think it is hard to determine that fine line (even with all the research…) between rent being too expensive/ too cheap.

    That is great for you.[:D]

    Profile photo of melbearmelbear
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    @melbear
    Join Date: 2003
    Post Count: 2,429

    I agree with the concept of first person to mention the number losing. I’ve seen it a few times recently.

    Well done on your negotiations – plus you got yourself a 2 year tenant!!

    Cheers
    Mel

    Profile photo of kay henrykay henry
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    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Do people think that in this environment of rising interest rates and a more cometitive rental market, that 1 year leases are more and more common? I remember when 6-month leases were de rigeur, but I am certainly seeking one year leases these days- at least then, I can budget/plan for 12 months.

    Are other people pushing for 1-year leases too? Do you prefer 1 or 2 year leases? Would 2 year leases bother you because you cannot do a rental review after 1 year?

    kay henry

    Profile photo of yackyack
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    @yack
    Join Date: 2003
    Post Count: 1,206

    Its normal practice in the areas I invest for 12 month leases.

    Six months is too soon, before you know it, its expired.

    Two years is a long time for a tenant to commit so its rare you get someone who is prepared to sign for that period. I once had someone prepared to sign for 2-3 yrs but decided not too. I just thought it was too long a period.

    As i pay a weeks rent for a lease signing, I think you want value for money – so 12 months is what I expect.

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