Hi, I am looking at purchasing a 2 year old property, which I have completed my due diligence on and everything looks good. However the current tennant is apparently a bit slow with rental payments sometimes (but pays when prompted) and has a 10 month old German Shepherd dog which he keeps outside. The dog has trashed the back screen door and dug up the garden. The tennant says he will replace the back door and fix up the garden before he leaves (but he wants to stay on).
Is it worth it? And if he up and leaves the place like that where would I stand claiming insurance, would they cover damage that was done before I purchased property?
Would be grateful for anyones opions and advice.
NonnieHi Nonnie
Is the tennant on an expired lease ?
If yes, simply write vacant posession into the contract, and include any make good repairs before settlement.
Hi Matt,
The lease expires in July and he is paying a good rent for the area.
Nonnie
Hi Nonnie
It is a common practice for tennants with a bad rental history to offer above market rent in order to secure a rental property.
Please don't let this fool you… An extra $20 – $30 per week ($1000 – $1500 per year) is very little compensation for the effort involved when dealing with a tennant who is constanly behind in rent, causing damage to your property etc.
In regards to the current situation, if you did want the tennant out prior to settlement you could offer a delayed settlement until July.Alternatively, buying the property with the current lease in place is really just a calculated risk…. Eg, How much more damage will the current tennant cause prior to leaving.
NonnieE wrote:Hi Matt,The lease expires in July and he is paying a good rent for the area.
Nonnie
That's when he's actually paying it.
There's so much stock on the market atthe moment, I'm not sure I would bother with the hassles of this property.
Thanks for your input guys. I think you're right Matt, I am now suspicious of the tennant payment above market rent. Maybe I will look at another property or off long settlement as you suggested.
Cheers
If the property is a good purchase (Eg. Cost, Location, Structural Condition, Actual Market Rental Return etc) i would still chase it, but only with the condition of vacant / delayed settlement.
Cheers
Matt_Arnold wrote:Hi NonnieIt is a common practice for tennants with a bad rental history to offer above market rent in order to secure a rental property.
Please don't let this fool you… An extra $20 – $30 per week ($1000 – $1500 per year) is very little compensation for the effort involved when dealing with a tennant who is constanly behind in rent, causing damage to your property etc.
Totally agree. The additional rent is generally not worth the lack of sleep.
Make sure you add all of those repairs into the contract before purchasing. It doesn’t matter what the tenant says – it’s up to the owner to rectify the issue, they’re the ones selling the property.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie, I will certainly do that. Houses aren't selling that quick there at the moment so I should be able to do this with no trouble.
Cheers
Nonnie
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