Help! About to take over a self-managed lease

[onion33]

I am about to sign contracts on a property that currently has a tenant until April 2015 on a self managed lease. Can you please give me tips to make this go smoothly?

So far I need to consider:
- currently renting for 360/week but should be about 380 with agent fees
- making sure bond gets transferred to me
- introducing myself to the tenant. I believe people treat your place better if they know you and you can build a good rapport.
- perhaps getting a rental agent involved although paying agent fees on the already lowered rent might suck
Other stuff?

 

[D.T.]

Just because the previous owner was self managed doesnt mean you have to be, unless you want to be?

 

[pinkboy]

I am about to sign contracts on a property that currently has a tenant until April 2015 on a self managed lease. Can you please give me tips to make this go smoothly?

So far I need to consider:
- currently renting for 360/week but should be about 380 with agent fees
- making sure bond gets transferred to me
- introducing myself to the tenant. I believe people treat your place better if they know you and you can build a good rapport.- perhaps getting a rental agent involved although paying agent fees on the already lowered rent might suck
Other stuff?

Dont be so naive.

pinkboy

 

[onion33]

OK cool. Good to know.

I guess it's just coz the rent had already been lowered to exclude agent fees, so paying fees on 360/week might suck (but could be worth it if it's only from jan-april till the lease expires).

I'll do some calculations and see what the difference is.

 

[DaveM]

Recently bought an IP with tenants in place which was self managed. Gave mgmt forms to my existing PM in the area and he took care of it all, with a minimum of phone calls/fuss (for once)

 

[onion33]

Dont be so naive.

pinkboy

I know it sounds stupid but it's similar to how agents tell you to leave a note to the tenant on the bench welcoming them and asking that they treat the place well. They said it almost always results in better care from the tenants. And I guess that have a lot of experience that.

But thanks for your feedback. Any feedback is welcomed

 

[property_girl]

I know it sounds stupid but it's similar to how agents tell you to leave a note to the tenant on the bench welcoming them and asking that they treat the place well. They said it almost always results in better care from the tenants. And I guess that have a lot of experience that.

But thanks for your feedback. Any feedback is welcomed

Onion, no it doesn't sound stupid.

I've never heard it said to leave a note for the new tenant welcoming them. Maybe that's what I've done wrong. I self-manage only one of my places. I thought I had a good rapport with the tenant. She moved out last week and I have spent the last three days cleaning--an oven that hasn't been cleaned in four years (I've used two full cans of oven cleaner and it's still not clean), four years of black grime and fat all over kitchen cupboards and doors, no shelves wiped down in four years, windows disgusting. Some tenants, no matter how good the relationship, simply have never been taught how to clean. I hope you have one that does know how to clean.

I will now be handing it to a real estate agent because I don't want to deal with any more tenants. You can give it a try and see how it goes.

Simply get in touch with the Rental Bond Board in your area and tell them you have taken ownership. Good luck.

My opinion is that if you have good tenants leave the rent as it is. Up to you though.

I don't like getting too friendly or familiar with tenants. Depending on the type of people they are, they can then start thinking that they can ask for anything and it makes it harder to say no. They can take liberties. They can start ringing you for stupid things to be done--things that they can do themselves. I find it's best to keep a safe distance and keep the relationship on a professional level.

 

[The Y-man]

We bought a place that had self-managed tenants. We got the agency we bought through to take over - all sorts of issues - the main one bing no condition report - so the tenant comes up with all sorts of stuff that needs reparing and fixing as soon as we take over.

The Y-man

 

[womble66]

coz the rent had already been lowered to exclude agent fees

Previous owner was an idiot.

One of the benefits of self-manage is to maximise yield so by charging below market rates to give then tenant the benefit while taking on greater risk may indicate why they are selling.

 

[D.T.]

Previous owner was an idiot.

One of the benefits of self-manage is to maximise yield so by charging below market rates to give then tenant the benefit while taking on greater risk may indicate why they are selling.

But then you can't negative gear by as much?

 

[Angel]

But then you can't negative gear by as much?

Isn't the highest priority to make a profit? Negative gearing shouldn't enter the equation. Or is your comment to get Onion33 thinking about what he is doing?


PG, why not pay professional cleaners and take the fee out of their bond? That is partly what the bond is for.


Onion33, you can ask your solicitor to get you a copy of the tenant's lease and bond registration as soon as they are legally available so you know what they say. Another tip is to ask the tenants if there is anything they think needs maintenance and take good notice of what they say. It will give an idea of what you might have to deal with and whether you really want to buy this property or not.

 

[onion33]

Onion33, you can ask your solicitor to get you a copy of the tenant's lease and bond registration as soon as they are legally available so you know what they say.

Will do. Think I'll get managed. Can't be bothered with all the complications that could arise.

 

[property_girl]

PG, why not pay professional cleaners and take the fee out of their bond? That is partly what the bond is for.

.

One of the reasons I will now give it to an agent is because I do not want to deal with another tenant who cries for an hour about how having to leave her 'home' has triggered memories of coming to Australia as a refugee from Serbia, about now having to go into 'emergency accommodation' (when it is she who gave me notice and rents are cheap at the moment), about how clean the place is, about why she shouldn't have to clean balconies and dishwasher, etc(because she never used them). Really I couldn't be bothered to fight and just wanted to see the back of her. I told her to use oven cleaner, but she didn't know what it was. Sometimes it's not worth the hassle. end rant.

 

[WASP]

OK cool. Good to know.

I guess it's just coz the rent had already been lowered to exclude agent fees, so paying fees on 360/week might suck (but could be worth it if it's only from jan-april till the lease expires).

I'll do some calculations and see what the difference is.

Why? The point in self managing is that you get the agents cut

 

[onion33]

Another quick question:
In Victoria, they suggest you get insurance as soon as you sign contracts (don't wait for settlement). Does that mean:
Building AND landlord insurance?
Building insurance only?

Thanks!

 

[D.T.]

Building only at that point, youre mostly trying to protect against it burning down during settlement. I usually get the policy that comes with both building and landlord anyway

 

[Macca]

Another quick question:
In Victoria, they suggest you get insurance as soon as you sign contracts (don't wait for settlement). Does that mean:
Building AND landlord insurance?
Building insurance only?

Thanks!

If you want a safe secure investment then you need both as there is a tenant in place.

 

[MichaelGilbert]

Another quick question:
In Victoria, they suggest you get insurance as soon as you sign contracts (don't wait for settlement). Does that mean:
Building AND landlord insurance?
Building insurance only?

Thanks!

I think they mean organise it now so your insurance policy takes effect from settlement day (for both). I have not heard of having to have building insurance before it settles as it's not your house yet.

 

[danwatto]

But then you can't negative gear by as much?

Lol haha

 

[SOP]

I have always insured my properties as soon as I have a vested interest in the property. So as soon as contracts are exchanged.

What would happen if the property burnt down during settlement and the vendor didn't have insurance.

An extra 2-3 months insurance is nothing when comparing to the purchase price.