Have dropped rent by $35... ouch!

[INVSTOR]

yes, 2 weeks letting fee + GST would be $858 which equates to $16.50pw. I think the ongoing management fees average about 15% so it's changed from a net of $238.50 under management to $390 private

Good for you! I've found also looking after a couple of properties for the past 11 years I usually rent for $20/wk more than agent appraisal. For no more than 8 hours per tenant turnover you can save $150/wk. (x2 - $300/wk) (x3 - $450/wk). Although banks don't consider it when applying for loans it beats turning up to work 3 days a week.

 

[Azazel]

yes, 2 weeks letting fee + GST would be $858 which equates to $16.50pw. I think the ongoing management fees average about 15% so it's changed from a net of $238.50 under management to $390 private

Was it $370/wk - 15% = $314.50? $238.50 is like 45% isn't it?
15% is pretty high.

 

[Big Will]

There might be something in this. More investors recently, creating more rental properties?

sarcasm...

Yes more investors and more properties being built for them, look at the construction start for Multiresi over the last 12 months and what was the forecast..

 

[Roosterman]

Rents still going up slightly in West Ryde, Sydney. I've got a 2 bedroom unit there finishing lease at $440 per week, PM has just re-signed the tenant for 12 months at $445.

Vacancy rate of less than 2% probably helps

 

[TMNT]

Went for a drive past that property last week,still looks rentable but the town seems a bit low numbers on renters, I never did a title search so thanks for the numbers,,,or as Bob-Marley once said,,
Some feel the rain , Others just get wet..

Im not a smalll town expert but i woukd suspect a few more or less people looking for rentals would alter the vacancy rate signfincistly

And if there was a boom where rent was 1300 per week

Wouldnt an elderly couple or family rent their ppor out and go live with relatives?

Just seems nuts that a town with pop 3000 the rent would even get that high. Or for only a few months and then collapse back to equilibrium

 

[Big Will]

They have huge demand and very little supply.

When you add in flights to and from + accommodation, becomes cheaper just to rent a place. With higher rents it increases the price.

Supply and demand 101...

 

[Nick Valsamis]

Rents still going up slightly in West Ryde, Sydney. I've got a 2 bedroom unit there finishing lease at $440 per week, PM has just re-signed the tenant for 12 months at $445.

Vacancy rate of less than 2% probably helps

With increasing the rent, it's good to make sure that the agent still gave the tenant the 60 day notice to increase the rent. Just in case the tenant becomes aware later on down the track and then you have to pay back the amount increased and reissue the notice correctly..

 

[Ausprop]

Was it $370/wk - 15% = $314.50? $238.50 is like 45% isn't it?
15% is pretty high.

no just to clear this up... I pushed the agent to get $370 back when economic times were better. When things started to slow down they couldn't relet at that rate so I agreed for them to accept an offer at $300. When it came up for renewal just recently they suggested I leave it at $300 as they felt it was about right. I said no, booted the tenant, then relet myself at $390.

In WA, PMs collect 2 to 3 weeks letting fee, and throw GST on top, for signing up a 12 month lease. This can be averaged over the 52 weeks to an equivalent weekly rate (In Karratha this use to be roughly $5,000 - $8,000 out of interest). 15% for the rest would be about right by the time you consider PCR, inspections, P&P etc etc

 

[Azazel]

no just to clear this up... I pushed the agent to get $370 back when economic times were better. When things started to slow down they couldn't relet at that rate so I agreed for them to accept an offer at $300. When it came up for renewal just recently they suggested I leave it at $300 as they felt it was about right. I said no, booted the tenant, then relet myself at $390.

Ah right, they wanted to leave at $300. $300 to $390, no question, well done!

 

[Ausprop]

Ah right, they wanted to leave at $300. $300 to $390, no question, well done!

there was also the contagion to deal with, next door was at $350 and of course everyone natters, so agent then tells me next door is asking for a reduction from $350 to $300 as well. Fortunately I just said no and they are still there.

 

[Ausprop]

so my point here is not to boast about how lucky I got, but to say that when you go thru a PM they have a portfolio of property, they will do the right thing and try get market rents but they won't push yours hard because they can't do it for all their properties as they would all be way above 'market'. Where as you as owner, with one little property amongst hundreds, can take more time to pitch it properly, meet the applicants and look for a quality tenant that will pay above 'market'.

 

[Nick Valsamis]

so my point here is not to boast about how lucky I got, but to say that when you go thru a PM they have a portfolio of property, they will do the right thing and try get market rents but they won't push yours hard because they can't do it for all their properties as they would all be way above 'market'. Where as you as owner, with one little property amongst hundreds, can take more time to pitch it properly, meet the applicants and look for a quality tenant that will pay above 'market'.

My experience is that tenants will only pay above market value if:

1. there are not many properties available
2. they keep missing out
3. they love the place
4. they want to be in that specific location or building
5. they haven't looked around to get an idea of what the market rate is

To most PMs it is just a job for them so they don't really care if they could have got a bit more rent for the owner, as long as their job is done quicker and easier. This is almost always the case for the larger agencies because they over-leverage their capacity of managements.