Do you think that I am ripping off my new tenants?

E

eternit

Hi,

I have a property in QLD for which a lease has been signed for 6 months. The property is a nice 3 bedroom house about 2 minutes from primary school, high school. And about 5 minutes drive from major shopping centre. This property is in South East of QLD.

Anyways I wanted my PM to advertise the property for renting at $320 per week but my PM was hesitant as the properties in the area are renting for $260-$300.

Now, one family called and now have signed up a lease. This family was previously living in a house paying $130 per week but that house is getting demolished. The PM has told me that family is really nice people. The male is 67 years old, the lady is 66 years old and the daughter is 13 years old. There total weekly income is around $1200 per week.

I feel bad because they are coming from paying $130 per week to paying $320 per week. I dont know if I should lower the rent to $300 per week maybe.

What do you think?

Thanks.
 
They've done very well to be paying such a low amount up until now. Don't be concerned that you are charging the market rent. If they didn't want your house, they would not have applied for it. They may be receiving some rental assistance anyway from Centrelink. You don't need to protect them from the realities of the current market. If you want to be a nice landlord, leave them a welcome basket.:)
 
You will probably find that there is nothing much available for the price they are paying you.

Don't know where the property is, but we have just spent two and a half weeks straight painting and sprucing up a house for my parents at Balmoral, great area, close to popular Oxford Street, two multi cinemas, schools etc. We advertised it last Saturday and got one call and one looker (local tyre kicker really). It is interesting because rentals are supposed to be tight.

Anyway, we found a local rental agent (not attached to a real estate agency) who put it on the net the same day. They called from our ad in the Courier Mail and were happy to find a tenant in exchange for a week's rent. Got one call today from the Courier Mail ad and one call from the agency. The people who got the details on the net (realestate.com.au) have taken it. They are a really impressive, nice couple.

Interestingly, they said they have been looking for several weeks and were getting fed up. Started looking under $400 per week but found nothing that was good enough. Photos on the net can be deceiving and things that look nice, can be not so good in the flesh.

Anyway, they decided they would have to go over $400 and have taken my mother's house at $440 including yard maintenance. They said it was the best they have seen. It is only a brick three bedroom, one bathroom, but freshly painted throughout (thanks to me :D ) and new large outdoor paved area and shade sail and separate office downstairs. It is nothing special (no ensuite, WIR etc). Just a freshly painted, clean house near lots of attractive restaurants etc.

I just find it interesting that after hardly any interest, these people snapped it up in an instant. No queues of people wanting to rent it, like we see on the news but the best they had seen in weeks.

I cannot figure out what the market is doing but very happy with $440 per week.

Wylie
 
That was the first thing I noticed too - the woman would have had to be 53 when she had the baby. Maybe it is their grandchild?
 
eternit said:
Hi,

I have a property in QLD for which a lease has been signed for 6 months. The property is a nice 3 bedroom house about 2 minutes from primary school, high school. And about 5 minutes drive from major shopping centre. This property is in South East of QLD.

Anyways I wanted my PM to advertise the property for renting at $320 per week but my PM was hesitant as the properties in the area are renting for $260-$300.

Now, one family called and now have signed up a lease. This family was previously living in a house paying $130 per week but that house is getting demolished. The PM has told me that family is really nice people. The male is 67 years old, the lady is 66 years old and the daughter is 13 years old. There total weekly income is around $1200 per week.

I feel bad because they are coming from paying $130 per week to paying $320 per week. I dont know if I should lower the rent to $300 per week maybe.

What do you think?

Thanks.
Click to expand...

Do we think you are ripping them off?

I guess the most important question is Do you think you are ripping them off?

So what if you had stuck to the agents rental opinion and taken $20 less?? Sounds like they were either on a good wicket previously or they have decided to move up in the world.

Don't lose too much sleep over it. They chose your property.
 
You have a product you put on offer. They took the offer. What's the problem? If they didn't want / couldn't afford to pay the rent you asked for, they could have chosen another property.
Alex
 
Welcome to capitalism. Reckon you could put the rent up to 340 in 6 months?

Cold heartedness aside....they chose to take the offer.
 
I have no idea how they were paying only $130 previously, but on $1200 a week $320 is just over 25% of there income which is pretty good considering what some people pay.

You are not forcing them to pay this, and its not like this is the only place around
 
eternit said:
I feel bad because they are coming from paying $130 per week to paying $320 per week. I dont know if I should lower the rent to $300 per week maybe.

.
Click to expand...

Don't! You are not a charity. Property investing is a business. You need to treat it as such. Remember you have a considerable amount of $$ invested & you need to receive a return for that. If you feel the need (or want), then leave a small gift box as a welcome present.

Keep your properties well maintained, charge market rent & leave your emotions at the door. If rents continue to rise, then raise your rent too.
 
Eternit, if it makes you feel any better, go buy a $5m mansion in Sydney, and rent it to me for $20 per week more than I'm paying now.
Alex
 
Well, we've read about them, but are they real??? Here we have it, folks - a good old RENTAL AUCTION!!! Any further bids, or does skater get to rent the non-existant $5M mansion??? :D

Cheers
LynnH
 
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