How should i go about it?

[MIW]

Thanks everyone for advice and opinions As I said I am still learning so everything helps. Without answering everyone individually and theres no need to, I admit I was rash and accepted what the property manager presented to me at the time while I was at work. I wanted it leased asap and didn't think how much I was losing out. But the rent is not everything, I am not happy with other stuff which I have already mentioned.

I will explore the opportunity to change PM and agencies and if I am able to set new terms and put up the rent I will. I am not running a charity, it's business and if the tenants want to leave over me upping the rent to what people next door are paying which is $40 more per week than they can go look somewhere else.

Basically, you cannot up the rent on a fixed term lease! If the fixed term lease is for 12 months you have to stick it out as you entered into a binding contract between the tenant and you, the agent does not matter, nor changing to any new agent!
Periodic month to month is different.
Yes, you can change the agent, just check what agent agreement you signed! Some lock you in to pay them 90 days (about 3 months) when you leave them.
The only thing you could do would be to ask nicely, to negotiate with your tenants, but I doubt they would want to pay more.
A friend bought a unit which was tenanted on a 12 month lease and with 10 months left to go. She did not want the tenants as she wished to move in. The seller/vendor was able to negotiate to break the lease with the tenant with some compensation (finding alternative accommodation, some money compensation, covering break lease fees).
Either way, if you agree on something and sign a contract for a period of time it doesn't matter, what you do you have to stick with it to the end, unless you wish to compensate that person, they agree, and then move forward.
I hope that makes sense, and good luck, and we all learn from those first mistakes, right?
By the way, I also always rent out at $5-$10 below the market value so I can have quicker change overs.
I heard one lady uses a strategy, where she tells the tenant to drop the rent by $5.00 every 3 days it is not rented out and advertised. I haven't tried that but she recons this strategy works for her every time......

 

[Dbz_Vic]

D.T. - Wrong thread?

Willair - I think i understand what you are saying, thanks.

Ed Barton - You misunderstood what i said. What i meant was my lost rental income was my tuition fees.

Sez & MIW - Much appreciate your advice. My rental appraisal was $500pw from my PM, and was advertised at $500pw to start with. Another property similar to mine was also advertised for the same rent at around the same time. I then asked for it to be reduced after 2 weeks to beat the competition and kept dropping to $430pw before PM found someone only willing to pay $400pw. At that time the competition was still asking $460pw and many other similar properties asking $450-$500pw. $400pw was asking rent for brand new 2 bedroom 1 bath properties, mine was 3 bedroom 2 bath.

Anyway, water under the bridge for now. Its not the apocalypse, value of the property grew more than 10% so the equity has more than made up for the cash flow shortfall.

My inexperience saw me asking other investors here a seemingly clear cut question (not so to me) about a legally binding rental agreement which has terms and conditions mind you, and i was under the impression that the landlord had more room to move even under a fixed term lease, and was looking for some "out of the box" answers. Unfortunately i had no special clauses or terms included in the lease so that's it.


LeoT & Fence - I don't think you both have much more to contribute here apart from stroking each other's egos. So please if you both have nothing more to add move along and do this somewhere else

 

[LeoT]

Dbz,

Lets say that even if you were legally allowed to change the contract terms if you changed agents (which of course you cant) , but lets say you could. Assuming the tenants stay: (if they don't stay, if it takes you 2-3 weeks to find someone, the interest you pay will be eat up most of the increased rent anyway). But assuming they stay;

Do you think its a wise business decision? SO you increase the rent by $40 times by 52 weeks is $2080.

1.By annoying the tenants in this way they could easily cost you more than $2080 a year (after bond)
2. Starting off like this, would they really care/look after about your property?
3. If you needed access to the property, would they make it more difficult for you, more frustrating for you?
4. Will they feel inclined to pay rent on time? or always late?
5. Will they complain about every little thing that they want fixed (a lot of which is within their rights).
6. Tenants CAN make it hell for you. All legal. And you cant touch them.




Yes, you have remedies to some of the above, but it doesn't come without much added stress, frustration, time wasted and often unreimbursed costs involved.

So possibly all (or some of) the above, for $2080 for the year.

Is it a wise business decision?

Or is it a wiser choice to learn from the mistake (if it was one), honour your agreement with the tenants and wait your 10 months or so before you renegotiate the contract.??

To me the issue is your approach, not your newbiness. I'm trying to get you to realise that if you run your property business with this attitude, it is going to cause you much heartache, cost and frustration in the future. I can tell you now, a lot of people will just be polite and dance around the issue. I'm giving it to you straight.

1 more thing worth noting: Our tenants are probably our greatest assets. No one is going to build any property business without their tenants. Treating them with at least some regard is in your best interest.