yes it is very high, admittedly, i wouldnt sell in a market where the vacancy is that high unless its bleeding money or there are better CGs, i think its the worst time where everybody is trying to sell
A few Vacancies has got me scared!
- Thread starter TMNT
- Start date
yes it is very high, admittedly, i wouldnt sell in a market where the vacancy is that high unless its bleeding money or there are better CGs, i think its the worst time where everybody is trying to sell
The thread is in time ...
My Rutherford PM said tokeep rent below $300 to minimise vacancy, but expect no less that 3 weeks waiting time. Property across the New England Hwy have been vacant for 3.5 months apparently
Makes me want to keep my tenant despite being they're behind in rent...
Which area? I hope not Rutherford one ...
not rutherford, but hunter valley
and yes im going to try and keep the tenant as best as I can
I do periodic, because most of my pms charge one week even for reletting which im not entirely happy about but since everyone else in the area does anyway,
so maybe im shooting myself in the foot by being tight butt and not paying the one weeks
on the other hand the way I see it, if a tenant wants to leave, they will, if they want to stay they will, I guess having a lease they wont be tempted to look around, so yes I guess im contradicting myself too.....
time for another beer
It has been my experience that if a tenant wants to leave, they will. If they are happy where the are, they don't bother looking at other properties, even if their rent is high due to a softening rental market.
I think that is very true, and often tenant feel the obligation to move out on expiration. The one week relet and other expenses relating to execute a renewal does add up esp on 6month lease.
Say your rental is $350/wk. If 2 renewal per year is $700 ( and possibly a GST component agent charge as well). That's almost 4% of rental per year or $14/wk.
On expired lease, its a double edge sword that agents can give short notice and vacate, but you can also increase $5 every say 4 months, would mean a $15 increase for the year.
yes its usually 1 week + gst, some agencies have half weeks, the odd ones havea $30 admin fee for renewking, I think it depends on which area, some of the areas I have the lowest PM fee is 9.9% inc gst, I struggled to negotiated down to 8.8% inc gst,
I think its very unreansaoble if an agent charges you 1 weeks fee for reletting a 6 month lease though!!
thanks for your comments guys, I have decided to stop buying for the first 3 months and wait until these vacancies have sorted themselves out and so my SANF is good,
Some try to charge a % of the first years rent as a letting fee. I have found that equates in some cases to up to 2.5 weeks rent - ouch! Our recent property acquisition we were told above was the case but since we bought through them they will do one weeks rent plus gst.
Best of luck getting through this patch TMNT
Best of luck getting through this patch TMNT
I wonder the near future trend for investors is to give more weight/criteria on vacancy rate before buying...
1. The mortgage payment is cheaper buying than renting
2. The yields are good for investor.
Both above are influenced by lower interest rates, and vacancy rate might shoot up rapidly before you know it... So it may be double edge sword for lower interest rates?
Had a quick look at few Muswellbrook rentals on rpdata.
It appears to be trending downwards. Owner that was getting $420/wk in 2010/2011 but after 1-2 months of listing, it falls back $350/wk today
1. The mortgage payment is cheaper buying than renting
2. The yields are good for investor.
Both above are influenced by lower interest rates, and vacancy rate might shoot up rapidly before you know it... So it may be double edge sword for lower interest rates?
Had a quick look at few Muswellbrook rentals on rpdata.
It appears to be trending downwards. Owner that was getting $420/wk in 2010/2011 but after 1-2 months of listing, it falls back $350/wk today
As per Skater it's part of doing business.
I differ somewhat from Skater as we do keep our rents just under market, maybe $10 -$20.
When the properties change over we do charge slightly above market. This tends to set the market and then we also start increasing all the rents for that particular block of units. The tenants do all the hard slog of advising each other
The main reason that the properties end up below market is that I prefer having long term tenants and having the rent a little cheaper seems to keep them put.
As a result across our whole portfolio we have many long term tenants. Saves us a lot of work cleaning and repainting etc between tenants.
Cheers
PS Forgot to mention that we hardly ever resign a new lease and tenant goes on to periodical. The only time we sign them up again is if things have changed or they request a new lease. My PM does not charge me anything bar the statutory fees.
I differ somewhat from Skater as we do keep our rents just under market, maybe $10 -$20.
When the properties change over we do charge slightly above market. This tends to set the market and then we also start increasing all the rents for that particular block of units. The tenants do all the hard slog of advising each other
The main reason that the properties end up below market is that I prefer having long term tenants and having the rent a little cheaper seems to keep them put.
As a result across our whole portfolio we have many long term tenants. Saves us a lot of work cleaning and repainting etc between tenants.
Cheers
PS Forgot to mention that we hardly ever resign a new lease and tenant goes on to periodical. The only time we sign them up again is if things have changed or they request a new lease. My PM does not charge me anything bar the statutory fees.
The best advice I have is try to see the situation 1 year later,
if you think the problems are underlying, then you have a problem
if it was a temporary blip, then try to sleep!
if you think the problems are underlying, then you have a problem
if it was a temporary blip, then try to sleep!
Very true.
And to be truthful, its usually a better investment of your time to focus on getting a new tenant than to hold the old ones to any outstanding payments.
Much less headaches to have landlords insurance and factor in these incidents as unavoidable
I had one in Maitland (Tenambit) near Rutherford...had to drop rent to $315pw from $355pw because if mining down turn.
I was also told recently (a few weeks ago) there have been dramatic drops in rent in Rutherford
We have our place in rutherford rented through pacific link housing (its a organisation that provides affordable housing to low income earners)... the rent it less then market value but we are guaranteed rent and we have the best tenant in there! Our contract runs out this year and I did plan on not renewing but after hearing all this I think I need to reassess that ................
That's why buying in the right location is important.
