Dodgy RE Agent not passing on full rent?

[memphis2009]

I have no idea why you'd do business with somebody about whom it would enter your head to think "he could dummy one up and give me a 'fake' agreement couldn't he?" If you think this is even a remote possibility, it's time to get a new PM.

Again, as I have explained, it's not that I don't trust him, it's that the situation seemed a little unusual to me. I don't know of many people that would waltz into a real estate agent, put down 2 months rent worth of bond and simply say "get me a place for $300 p/w".

If the agent's done nothing to make you distrust him, and you're just this suspicious of everybody, then I don't think you're going to enjoy owning investment properties.

I am new to investing in property so of course I am going to be suspicious if I come across a situation that doesn't seem to add up. That's just common sense. If I had been in the game for many years then I'd know what to expect and probably won't be as concerned.

Even if you self-manage, you'd worry about what the tenants were doing, if this is your nature.

Of course, just like anyone with common sense would. That's why agents do 3/6 month inspections to make sure the property is ok. You'd be worried too if you found out that your tenants greased out your whole kitchen, staining the walls and clogging up exhaust fans with their greasy cooking.

 

[memphis2009]

You know where they live! What more do you need to know?

You're supposed to give tenants at least 24 hr prior notice before going to the premise. And the usual way to give notice is through the agent. But yeah like others have suggested, a letter is probably the best way.

 

[DavidMc]

I'd say it's a pretty hard thing for an agent to get away with (falsifiying lease documents, etc) and pretty serious fraud if they get caught.

Given that I wouldnt' imagine he's doing it, but you never know. It's easy to check anyway.

 

[evand]

You don't want to send a letter. You don't want any thing in writing.
Might be a bit ummm....uncomfortable if the agent gets hold of it.

I'd just pop in under some lame excuse and have a chat.

"Oh...i was in the neighborhood and wanted to check you were happy with the place and see if anything needs attending to.

And by the way, for my own research, how is the rent amount compared to other places you looked at? How much you paying again?"

yada...yada

 

[DavidMc]

I think evand is spot on. That's a good way to check if you really want to know.

 

[skater]

I think the property would probably rent for $330-340pw, but the agent has got this tenant in quickly on a lower price. The agent knows it's below market and so does the tenant. This is why the tenant accepted the extra $10 rental. If the agent does this, then it is an easy job for them. They don't have to worry about endless inspections & can get the place leased quickly with little effort on their part. They are really NOT working for you if this is their attitude. If it has only available for rent for a short time, why would you accept a lower than expected rental? Is there a glut of similar properties in your area, making this tenant attractive to you?

 

[memphis2009]

I think the property would probably rent for $330-340pw, but the agent has got this tenant in quickly on a lower price. The agent knows it's below market and so does the tenant. This is why the tenant accepted the extra $10 rental. If the agent does this, then it is an easy job for them. They don't have to worry about endless inspections & can get the place leased quickly with little effort on their part. They are really NOT working for you if this is their attitude. If it has only available for rent for a short time, why would you accept a lower than expected rental? Is there a glut of similar properties in your area, making this tenant attractive to you?

Well to cut a long story short, the existing tenants have refused to pay rent since the 5th September but thankfully I've managed to get rid of them on the 28th September (2 days ago). So I guess I was pressured to get somebody in there asap. Also according to the agent, there are too many vacant apartments in my block.

 

[skater]

OK, so it has only been 2 days. Why rush into a new lease if it is below market rent. Is there really a lot of vacancies in the building, or only vacancies with that agent? I find it funny that they can get a new tenant in 2 days if there is a lot of vacancies.

As far as the arrears go, you should not be out of pocket as you can take the bond.

 

[handyandy]

The convo went like this:
REA to Prospective tenant: Mate, mate, I think I can get you the place for $300pw mate. Pay a bond and I'll confirm it with the owner.
Prospective tenant pays 4 x $300.
REA to Prospective tenant: I'll get back to you once its all confirmed.
REA calls you.
REA to Prospective tenant: Mate, mate I've got good news and bad news. The good news is that you have the OK to rent the place mate. Now the bad news is, that it is going to cost you an extra $10 but mate, mate the market will pay $330 - you're getting a baaaaaaaaaaaaaaaaragin mate.

Its like I am listening in on the conversation

The other thing I hear is the splash of oil on those wheels in motion.

I do think that this agent has been trying to hard to condition you and because of that there is now a distrust of the agent.

So I agree with some other poster that ones the tenant is bedded in it may be time to move agents.

Cheers

 

[memphis2009]

OK, so it has only been 2 days. Why rush into a new lease if it is below market rent.

Again, I have had to suspend my mortgage repayments because of the rent issue so I was very desperate to get a tenant in. Although below market, it actually covers my monthly repayments so I'm happy with that for the moment. (Don't wanna get too greedy just yet )

Is there really a lot of vacancies in the building, or only vacancies with that agent?

Well I'm going to give the agent the benefit of the doubt on this because this isn't the first time that he's mentioned it and from what I know of the apartment (I used to live there) I wouldn't be surprised at people wanting to move out of there.
I just haven't had the time to cross check with other agents in the area.

I find it funny that they can get a new tenant in 2 days if there is a lot of vacancies.

Yeah, I don't know how this agent sources their tenants and this is probably what I'm most concerned about.

As far as the arrears go, you should not be out of pocket as you can take the bond.

Yes I am aware of this, however, in my particular circumstance I have been advised that I cannot claim the bond to cover lost rent.
That doesn't mean I can't get anything for it though... It just so happens that the tenants who are leaving have left the entire place in a mess and have caused damage to the property. So payment for damage, professional cleaning, gas fitter is all coming out of the bond. They're not getting away with it that easily

 

[memphis2009]

So I agree with some other poster that ones the tenant is bedded in it may be time to move agents.
Cheers

I'll see what the rental market is like in 12 months time. But I'm definitely going to do some research next time with other agents before renewing with the current agent.

 

[reinhardtslater]

Memphis, what suburb is your property in? Not Southbank? I heard that there were some issues with rents dropping in the apartments in there due to the slowing down of the market?
There is also a possibility that the agent has a tenant needing to shift ASAP who is doing a bond transfer?
I can understand that you are suspicious, but the agent should be showing you some evidence to back up their claims that the market has slowed etc (Ie. number of days other apts have been empty, how much other apts rented for in the last month or so etc. - All easily gotten off rpdata)
If they can't substantuate what they are saying, they are probably just being lazy and dont want to show several more people through the property. They should give you the option of taking this guy or leaving him... NO PRESSURE!!