How is it ever OK to sign a contract on an agreed rent, and then after a few months your not happy and want to just increase it? If you don't think its a ridiculous proposition then nothing I can say.
Leo
How should i go about it?
- Thread starter Dbz_Vic
- Start date
How is it ever OK to sign a contract on an agreed rent, and then after a few months your not happy and want to just increase it? If you don't think its a ridiculous proposition then nothing I can say.
Leo
Thanks everyone for advice and opinionsAs 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 bloody 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.
You aren't listening are you?
You cannot increase your rent. There is nothing to explore and you have no way of telling your tenant to pay more or move out.
You sound like a nightmare landlord, how is it any of their business that you now regret accepting less? When you bought the place what if the vendor had come back to you just before settlement and said they wanted an extra $20k? Would you halve agreed?
You can change agent but you signed a legal contract with the tenant and you cannot do anything about it until the lease finishes.
It is indeed "business" and you cannot "up the rent" until the lease finishes.
First things first. OK, I agree that you should treat it as a Business BUT you have to take responsibility for your actions. You agreed to the rent, you signed a 12 month contract and now you have to wear the consequences of your actions. $400pw FOR TWELVE MONTHS!!
You COULD have signed a 6 month lease, but you did not! Therefore suck it up and realise that there is nothing you can do about the amount of rent you have coming in.
The other thing that you have to realise is that it is the market that sets the rent. Ask too much & you don't get a tenant! It is quite common for homes in the same area to have a different level of rent. Even in identical units you get tenants that are not all paying the same.
I don't see anything wrong or ridiculous about that, IF there are provisions for the landlord to legitimately do so. My original post stated my position and what I intend to do about it and will take all the advise and suggestions on board.
Wow this thread is a winner at getting responses lol before I even finished typing I got 3-4 more . Alright I get the point people are trying to make especially those who are worked up, take a chill pill. The consensus is I have no leg to stand on re: rental increase until 2 months before lease ends no matter which agents I go with. Thank you. The area I wasn't sure about was if I were to change agents, would the contract then be void which then leaves me room to renegotiate. And that was cleared up too so much appreciated to those who contributed. As I said I have only changed agents once with a tenant on month to month so quite different to this situation with tenant on 12 mth lease.
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DBZ,
you mentioned you wanted to run this "as a business" which I agree 100%. The best, honest advice I can give you is to do a lot more reading from books etc and increase your basic property investment knowledge if you want success in the property investment business. I am not being sarcastic, im giving you honest feedback. You really, really need to do this. If you do, do doubt it will greatly be beneficial for you and your future property dealings. I would also rethink your business attitude otherwise there will be a lot more heartache to come. Again, this is not to be sarcastic or mean, but rather this is honest feedback I think you need, from one investor to another.
good luck and I really wish you the best.
Leo
you mentioned you wanted to run this "as a business" which I agree 100%. The best, honest advice I can give you is to do a lot more reading from books etc and increase your basic property investment knowledge if you want success in the property investment business. I am not being sarcastic, im giving you honest feedback. You really, really need to do this. If you do, do doubt it will greatly be beneficial for you and your future property dealings. I would also rethink your business attitude otherwise there will be a lot more heartache to come. Again, this is not to be sarcastic or mean, but rather this is honest feedback I think you need, from one investor to another.
good luck and I really wish you the best.
Leo
Something I will remember for next time. This is where i felt my PM was really average , as there was no real advice like this. I suggested including a 6mths rent review clause but was advised against it.
Mate, I think i have paid my tuition fees on this topic
Very well.
And you aren't reading properly.
Again, I am exploring switching agents and whatever possibilities I may have, which I have found from responses here to be not much. 2 mths before lease ends seems like the only time I could renegotiate.
Comes down to reading again! The terms and conditions! It has happened, and I know people who have been made to cough up more than $20k during a build.
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Thanks everyone for advice and opinions
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.
Looks like you have made a serious mistake,and when you sign a contract it works both ways,and the market dictates the rent and when you look at the timeframe this property has been vacant and the money lost in those timeframes it may be only worth $400.00,just put it down too unpaid experience and if you can't try some other investments ,because if you think this is a big problem then there are a lot worse in going down the road of property investing between what you think and reality in the wrong direction..
Hi Dbz_Vic,
As others have said, the contract with your tenants is binding regardless of who you have managing the property. You will need to wait out the lease.
With regards to the rent. It achieved $400 per week which is less than what you wanted but not necessarily under market (I would need to know more about area and make up of the house before I could say with any certainty). A lot of landlords are buying new properties now and finding that the rent isn't as high as they had expected because the space is smaller than the older bigger houses and people like space. Less than your appraisal amount or less than what you had wanted doesn't mean it is under market. If the market value was $500 per week or $480 per week it wouldn't have been vacant for so long.
You can increase the rent after the lease expires, however, please, please, please look at the market and take your PM's advice! They were right to say that you shouldn't look at a rent review 6 months in, something that has been vacant for 8 weeks trying to achieve a rent that is too high will not need a rent review in 6 months time. An annual rent review and possible increase should be enough to keep the property at market value.
Ask your (new) PM to show you how they decided if the property was worth an increase etc. when the time for a rent review comes up. They should be able to provide you with examples of similar properties that have rented and for how much backing up their educated estimate of the rental return.
When you had some appraisals done, did any of the agents appraise the property at a lower figure i.e one agent $400 - $430 per week as opposed to $450 - $500 per week that you went with? If so, contact them. They're at least honest and tell you what you need to hear and not what you want to.
Let us know how you go with your property hunt and if you need help finding a new PM.
As others have said, the contract with your tenants is binding regardless of who you have managing the property
. You will need to wait out the lease. With regards to the rent. It achieved $400 per week which is less than what you wanted but not necessarily under market (I would need to know more about area and make up of the house before I could say with any certainty). A lot of landlords are buying new properties now and finding that the rent isn't as high as they had expected because the space is smaller than the older bigger houses and people like space
. Less than your appraisal amount or less than what you had wanted doesn't mean it is under market. If the market value was $500 per week or $480 per week it wouldn't have been vacant for so long. You can increase the rent after the lease expires, however, please, please, please look at the market and take your PM's advice! They were right to say that you shouldn't look at a rent review 6 months in, something that has been vacant for 8 weeks trying to achieve a rent that is too high will not need a rent review in 6 months time. An annual rent review and possible increase should be enough to keep the property at market value.
Ask your (new) PM to show you how they decided if the property was worth an increase etc. when the time for a rent review comes up. They should be able to provide you with examples of similar properties that have rented and for how much backing up their educated estimate of the rental return
. When you had some appraisals done, did any of the agents appraise the property at a lower figure i.e one agent $400 - $430 per week as opposed to $450 - $500 per week that you went with? If so, contact them. They're at least honest and tell you what you need to hear and not what you want to
. Let us know how you go with your property hunt and if you need help finding a new PM
.Mate, I think i have paid my tuition fees on this topic
You might want to ask for a refund!
Hi
Some excellent responses in this thread.
After the OP reads all the informative responses, takes them on board and has a read and understanding of the act which I believe any good landlord should at least have a basic understanding of, they will then be in a much better position to act as a moral and ethical landlord.
Regards,
alicudi
Some excellent responses in this thread.
After the OP reads all the informative responses, takes them on board and has a read and understanding of the act which I believe any good landlord should at least have a basic understanding of, they will then be in a much better position to act as a moral and ethical landlord.
Regards,
alicudi
Hi
Some excellent responses in this thread.
Thanks...
After the OP reads all the informative responses, takes them on board and has a read and understanding of the act which I believe any good landlord should at least have a basic understanding of, they will then be in a much better position to act as a moral and ethical landlord.
Understanding the very basics of property investing is key.
Im afraid the OP has not much in the way of this.
It is advised to get cracking immediately and learn the rules of not only PI but how contracts work.
Fence, I and others have tried to get this message acorss. I think it was a waste of time.
Leo
