Help...How to do a market review notice in 4 days!

[pulse]

Hi guys, been a bit tardy recently, so a deadline has snuck up on me.

I own a bank in Cobar with an attached residence. The residence is under a seperate resi lease which has an annexure with potential for market review. The house is 1960s 3 bed timber with garage for $185pw. I bought it in December 2005.

The improvements since then:
new 2.5hp A/C in lounge
deck recoated
deck surrounds repainted
concrete porch painted
new exterior lights
various repairs, eg taps lights etc

The bank earlier wasn't very receptive to a rent increase so now's my chance. The evidence I have so far:

The DOH rent report states that in the year to March 2007 rents increased 49% so the median for new leases is $235pw.
The latest Herron Todd White report says

Rental increases (in Cobar) have outstripped (sale price rises of 30%) by doubling in some cases

I think $185 a week is a bit low considering the rents have increased so much in the last 2 years and mine has increased nothing! $20 extra per week would add $1000 rent and increase the value $10 000 based on the 10% yield I bought the place on.

The Lease:
The current lease expires 12/12/07 when a three year option begins with annual CPI increases:

eg 12/12/07 market review
12/12/08 CPI
12/12/09 CPI
12/12/10 market review
12/12/11 CPI
12/12/12 CPI

So if I miss this review I can't submit a new one for three years!

What is the accepted way of submitting a maket review? Comparative info is hard to find on websites. I was thinking of calling HTW to request a valuation but I don't know if they can have it done by Friday. I do have before and after photos of the A/C and the deck, and they already did the mortgage valuation in 2005.

Can I DIY and submit this info as well as a few quotes from agents or do I need to engage a valuer like HTW?

Thanks in advance all...

Cheers Pulse

 

[pulse]

Photos for interest

Some photos from before:

 

[pulse]

some after photos:

 

[HandyAndy888]

I like what you've done with the deck...I think it looks heaps better...surely it will add "psychological" value...

 

[pulse]

Anyone with any tips.. would local agents be useful?
Pulse

 

[GoAnna!]

I would definitely get rental appraisals from say two local agents. Use the one you like best ) Ask them to back up why they are suggesting a certain figure with comparisons to ther properties they let. It might be worthwhile to pay them for their time.

 

[pulse]

Thanks for the help GoAnna,

I sent the letter yesterday. I was inspired by this post by Dazzling.

I searched realestate.com.au and searched the two local agents. It found heaps of sold properties as well as current listed properties. I went through and found 10 similar properties where the listing mentioned the rent, I then compared these to my place to arrive at $270pw. All the "market evidence" was then forwarded to the tenant.

I'll let everyone know how it goes.

Cheers
Pulse

 

[GoAnna!]

I assume you are pitching this as high as possible (and hopefully even a little higher) so that when they argue you down from $270 pw to $250 you will still be more than happy?

BEST OF LUCK!

 

[pulse]

I was actually thinking its not really a negotiation, If I provide market evidence and they disagree then we get a valuer who decides the value.. anyway time will tell, I felkt there was pretty good evidence for $270, some old renovated 2 bed units with no parking are getting $250pw!

Cheers
Pulse

 

[GoAnna!]

You are free to negotiate or bring in the valuer. The valuer may come up the same figure or one higher or lower. If you can negotiate a satisfactory outcome its certainly the cheaper and quicker option

 

[pulse]

Hopefully they will agree, there are a few expensive dumps out there, so I think my place compares pretty well.

Cheers
Pulse

 

[Les]

G'day Pulse,

I'm struggling to understand the title of the thread vs the reality. You seem to be talking of 4 days to resolve this, when the review isn't due until December 07.

Can you explain the urgency for the uninitiated?

Regards,

 

[pulse]

Sorry Les, The lease agreement says I have to issue a market review notice between 90 and 60 days before the end of the lease, The day I found the lease in my files was 64 days before the end of the lease...

I haven't heard yet.. waiting with bated breath

Cheers
Pulse

 

[Les]

G'day Pulse,

The lease agreement says I have to issue a market review notice between 90 and 60 days before the end of the lease, The day I found the lease in my files was 64 days before the end of the lease...

Hmm, yeah, that makes sense - good luck with it, Pulse,

Regards,

 

[pulse]

Woohoo!

Just an update, letter came today stating that $270pw was a bit steep and they think $250pw is closer to market value... overall pretty happy.

This rental increase adds over $3000 to my yearly cashflow and increases the yield from 9.8% to 10.95%.

Overall it was easy, It goes to show you don't need to worry too much in negotiations with large tenants!

Cheers
Pulse