Hi all,
Generally speaking, I was wondering if the role of the property manager includes an agreement where rent is guaranteed for X number of years? I believe this essentially means that the property manager becomes my "tenant" as part of the agreement, and the responsibility of finding tenants is for the property manager's.
Just wondering how this works so that I can plan to engage a professional property management company for my next property, and tie in an agreement for a specific number of years. I see property as a "hands off" investment so the rental guarantee aspect provides some peace of mind.
Regards,
AjayIf you want this type of hands off type of property management you might be better off getting a DHA house.
check out
http://www.invest.dha.gov.auAjay, the property manager is your agent ie they have all your responsibilities but not the final say. Can you guarantee a return on your own property? Othewise, look into buying DHA, a developer's show house/property with a rental guarantee or buy into a property syndicate.
duckster wrote:If you want this type of hands off type of property management you might be better off getting a DHA house.
check out
http://www.invest.dha.gov.auHi Duckster – I invested in a DHA property in 2005. Fairly solid to date, however management fees are quite high.
Scott No Mates, so the answer is – basically even if I engage an agent, the rental is not guaranteed?
To me, it seems that the ONLY way to receive guaranteed property rent is to either sign a lease-back agreement, OR get involved in DHA properties.
Is that correct?
Cheers
AjayBasically , yes.
However the kind of properties that offer rental guarantees and extra arrangements are usually in obscure locations and have other bad karma.
Good capital gains appreciating property rarely has this type of "extra" frill thrown in.
Property investing involves taking some risk in order to crack higher rewards.
There are areas of Australia where the rental demand is so high tenants outbid each other to get the house…… now thats a real rental guarantee.
Rather than overpaying on the price of a house in the middle of nowhere built on a swamp with no future 5 years + …just because of frills such as a rental guarantee.
It is common practice for developers to throw in rental guarantees to investors for crap property … property which drops in rental return by up to 30% in 3 years or so. And guess what the value of a dirtied up house is when the rent drops by so much ……. yep a lot less.
You would be better off evaluating an investment property on basic fundamentals.
supply and demand – now and in the future.
Good houses in good locations with growth prospects and fair rental returns win every time.
If you are focusing on rent guarantees as the main issue, I think you should probably research your base strategy further.
….of course take my opinion with a grain of salt …. as everyone claims to be an expert and not everyone can be.
Good luck with investing , it is exciting times.
ajayayyar wrote:Scott No Mates, so the answer is – basically even if I engage an agent, the rental is not guaranteed?
To me, it seems that the ONLY way to receive guaranteed property rent is to either sign a lease-back agreement, OR get involved in DHA properties.
Is that correct?
Cheers
AjayYou've got it – the only guarantee you have is the bank guarantee/bond/security deposit. Even a lease can be broken however the closest that you will get is a sale and leaseback (DHA is just one example).
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