I have recently bought a property that came with a tenant (first mistake), the tenant is paying below market value for the property.
I researched the area and no where can you get a 3 bedroom house for the price the tenant is currently paying. I want to increase the rent to market value (adding $20 per week to the rent tenant already paying) tenant says can’t afford this etc etc agent says he is such a good paying tenant should think of keeping the rent the same as it would mean we would to advertise etc etc? [comp]
I think agent batting for the wrong side, as I don’t think I would have any problems getting another tenant or am I just greedy?
thanks
Jenny1
What the tenant says it true – it will cost you a weeks rent to get a new tenant and maybe more if they don’t take possession the next day.
Why don’t you split the diff and ask for $10? The tenant may be relieved it isn’t $20 and agree and save you the problem.
A good tenant is prob worth the extra $10 pw.
But what happens next year when you need anopther $10pw…..
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I think agent batting for the wrong sideThat may be so…but really…the sexual orientation of the agent should not enter into the discussion…[biggrin]
Back on topic – Jenny who is running the show…you or the agent ?? If you are confident of your research and know for a fact that the place may command a higher rent, it is encumbent upon you as Landlord to at least try for the higher rent. This hand wringing is the very thing that residential tenants play on to keep rents unrealistically low.
I never understand when people say tenants are such good payers, but they won’t entertain paying more…hmmm…something not quite ringing true there.
We inherited a whole bunch of ratbag tenants with our sheds, one supposedly who had been there 14 years and ‘always’ paid his rent on time. When push came to shove and some cash needed to be put on the table, all of the fillibuster and stories melted away and we were left with a non-paying ‘promise the world’ tenant.
In short, instruct the agent to jack it up or get rid of the tenant…and if that don’t work…tell the agent she’s next on the chopping block.
Take no prisoners Jen, this is business, not Emotional Domestic Niceties 101.
Hiya Dazzling
Just love it when you give me a kick with those pointy toe shoes! [biggrin]
Yes I know you are right, the agent has gone too far onto the other side (tenants) and keeps telling me little snipets of info how he is a battler etc.
The rent will be increased the tenant would need to pay a higher rate anyway if he left my place.
Thanks again
Jenny1
Hi Jenny,
We have had a couple of tenants in the past get into arrears (in the last couple of years), and both of them claimed that they didn’t have the means to catch up straight away etc. etc. etc. BLA BLA BLA….
We FINALLY gave notice to evict them, and BOTH OF THEM paid up rent arrears IN FULL (which was a lot of money by that stage) on the final day that they were to be kicked out.[biggrin][angry2][blush2][buz2]
After that date they both paid up ON TIME, EVERY TIME.[buz2][biggrin]
Was it a co-incidence, or are they playing you for a sucker????????
Good luck,
Del [biggrin]
Hi Del
They are playing me for a sucker, he would have to pay more money if he left my place.
Agents make me mad though, before I bought the place he said could get $260-270 per week rent now he is baulking at $250..might need to think of a new agent as well, I have now got 3 properties that he manages and I asked for a discount as paying 10.5% for each property. He said he doesn’t know as only gives a discount to builders!! [angry2]
Good to have competition will let my fingers do the walking tomorrow [biggrin]
Take care
Jenny1
We have our IP’s with different PM’s..makes negotiations easier [biggrin]
10.5% Is that including GST?
I thought it was bad in WA at the going rate of 9.35% (our lowest is at 8.5%)
Good luck with the rent increase $20 p/wk is a big jump (to me) in one hit, the tenant may leave on principle..however, you may just get a better one atthe higher rate, ya never know,let us know how you go..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI have had similar stories to share. We bought an IP 4 years ago and rented it out for $410 a week. After 18 months tenants moved out and we had problems finding tenants as the market was down then (high vacancy rates), so we dropped rent to $390 a week. A few months ago we found out the identical place next door was rented for $440 a week (with same agent) so I phoned agent to ask them to do a rental review. They gave me the usual spiel about how good tenants were and how much it would cost me to if tenants moved out etc. I told them increased rent would get them increased commission. Then tenants agreed to pay $410 a week (we were back to rent 4 years ago!). Last month tenants moved out and a new manager (from same agency) took over. She told me she advertised and increased rent to $420 a week (and we should be happy). I said no, advertise it at $440 a week. She did that and got tenants to move in this week at $440 a week. So, the bottom line is tell the agent what you want rent to be and if no tenants then you can reduce the rent. It is hard to increase rent rather than to reduce it to meet the market.
Another story was that on another IP we had 3 different agents providing rental appraisal – ranging from $510 a week to $540 a week (when we were looking to buy they all told us that the place would rent for $550 a week!). After settlement we told the selected agent to advertise for $550 a week. They were much against this. However, tenants were found and will pay $550 a week.
Sometimes I think agents think they are working for the tenants instead of landlords. Don’t get me wrong we are very reasonable landlords and always do the right things by tenants and we do care about maintaining our properties for the enjoyment of tenants.
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