how to find a tenant on 5 month lease

[dajackal]

Hi All,

My partner and I bought our first home together using the FHOG in May this year. We rented the property back to the owner whom vacated the property just last week.

We're getting married in January and only then do we intend to start living together in our new home. We want to find a new tenant and get some rent until then.

The property has been empty since last week and our property manager has been unable to get much interest from tenants wanting to sign up for a 5 month lease (assuming the lease starts early August and ends early January).

I was hoping to get some tips and advice from y'all on how to find a tenant...we don't want the property to be vacant for 5 months as we can't afford to be bleeding money (interest payments) due to some major upcoming expenses.

Thanks in advance!
-jack

 

[Propagate]

Have a try of some of the expat forums. www.britishexpats.com is a good place to start.

Being a recent entrant to Aus myself, it was damn near impossible to find short term rentals that didn't charge at hotel prices!

It's all down to timing though, depends if anyone is about to arrive and have no where to live.

We ended up having to take a 12 month lease within a couple of weeks of arriving in Melbourne as the rental market was a nightmare at the time. There were rental bidding wars on places we looked at and demand was so high no one was prepared to offer short term leases. Luckily, the place we secured ended up being well suited location wise for both our works and was a nice area, but we could easily have ended up stuck somewhere we didn't want to be.

Anyway, it's a thought.

 

[wylie]

You are trying to find a tenant for your own place for five months until you move in yourselves? Is that right?

Why not offer it at slightly lower rent so that it is competitive.

Or, just don't let on that you will not be renewing the lease at the end of the five months. Sure, it is a bit frustrating when the tenant has to move, but it cuts both ways and often the tenant might move anyway, so no more frustrating than when they decide to move and you are inconvenienced.

 

[marg4000]

5 months is an odd period, so even if you don't tell the applicants you won't be renewing, anyone other than the most inexperienced renter will hear alarm bells.

I would offer cheaper rent - and that is probably your only option.

If you find tenants, they will be up for connection of utilities and moving expenses. These easily top $1,000, so to move on in 5 months (and that period is decreasing daily) is a big expense, which will only be offset by cheap rent.

Are you both paying rent? Could one of you move in now?
Marg

 

[dajackal]

thanks all for your replies.

we're both currently living at home (with our respective folks). one of us could potentially move in first but we'd prefer to keep that as the last resort.

i've just asked the property manager to lower the asking rent, from $360 to $320. That's $880 off for the 5 month period. Would it be enough to compensate the tenant for any inconveniences caused?

thanks again!

edit: note - $360 is the market rent

 

[marg4000]

To my mind $880 would not be enough. I would have to save at least $1,000 just to break even, which does not take into account the inconvenience of packing and unpacking twice.

Do you have furniture? You may have more luck with a short term furnished rental, but you will have to weigh up the potential for damage.
Marg

 

[leiw16]

Jack... I think you'll have better luck with sub-letting... I have experience managing shared accommodation property and quite a few tenants only stay short term from 2 months to 6 months.

 

[bronwynt]

I am also looking at being in a similar situation.
My mother is wanting to buy a unit nearby and then live in England for 6 months and here for 6 months every year.
I have looked into who would want 6 month leases and it seems thegumtree.com is a great place to look as there are a lot of travellers looking for this time frame and also students.

 

[jaycee]

To my mind $880 would not be enough. I would have to save at least $1,000 just to break even, which does not take into account the inconvenience of packing and unpacking twice.

Do you have furniture? You may have more luck with a short term furnished rental, but you will have to weigh up the potential for damage.
Marg

how exorbitant ae your utility connection costs ?

For me I thin they'd be somethinge like

electricity NIL
gas NIL
ph $50-$250
internet ? say $250
foxtel $0-$250

ok $750 if I was really unlucky

But foxtel connections are free often and if phone was workign when last person lived thers shouldlbe $50 odd, not usre of internet connection costs just picked $250 cause it sounded much higher than I thought... could be as low as $200 I reckon, unless of course Ive missed somethign glaringly obvious, not like I havent done that in the past

 

[Sunfish]

Some above advocate "cheap rent". My thought was a "fair" rent with a clear statement that it can't be renewed. To compensate they can vacate at any time in the last month without penalty and without notice.

In the grand scheme of things, a few weeks rent should not be critical and the time vacant can be used do repairs and move in in a civilised fashion. I have never been one for the Frantic Weekend.

 

[marg4000]

Jaycee wrote:
how exorbitant ae your utility connection costs ?

Jaycee, I was referring to my earlier post where I included moving costs as well as utility connection costs.
Marg

 

[savoys]

Jack... I think you'll have better luck with sub-letting... I have experience managing shared accommodation property and quite a few tenants only stay short term from 2 months to 6 months.

sounds like a great idea, letting out per room, was thinking about student market, they may only want to stay till the end of the year, would probably need to be furnished though. Is it close to a uni?

 

[dajackal]

Hi All,

thanks again for your posts. the property is currently unfurnished.

as a last resort i will consider moving in, purchasing all the furniture + appliances, and letting out the second room.

but obviously this is not preferable as:
- it will be a stretch on the budget as we didn't plan to be purchasing furniture and appliances this early on.
- i would be getting less potential rent if only letting out a room
- less warm fuzzies for the two of us as we're not moving in at the same time

i'm thinking my next steps would be:
a) lower asking rent even more if still not much interest after this saturday's opening
b) consider hiring furniture and appliances so the property is fully furnished, then let out each room separately to the student community. my unit is 10 mins by bus to a major sydney university and close to train.

 

[Propagate]

By the time you've lowered the rent, hired furniture and the hassle of finding separate people for separate room etc, would it be worth leaving the advertised rent high to discourage anyone taking it, then offsetting the interest paid on your loan off your tax for the year?

That way, you may not end up as out of pocket as you thought, but wouldn't have the hassle of trying to rent it out for a short period.

 

[jaycee]

Jaycee, I was referring to my earlier post where I included moving costs as well as utility connection costs.
Marg

Im just surpsised $50/week is a reasonaable reduction for 1 month less than a 6 month lease, never thought of this before maybe, soudns pretty high to me

 

[Perp]

I wouldn't look at letting by the room. You have enough on your plate with getting married in January, and this is a fairly labour-intensive strategy that can be stressful. (I have 16 student tenants.) As it's going to be your PPOR, it's also highly likely that they won't treat it with as much respect as you'd like, and you'll find that emotionally difficult.

I'd be looking at corporate lets, if it's of an appropriate standard. They often have difficulty placing academics who are coming on a sabbatical, for example, or people working on short-term contracts. If you can get a 4-month rental, and actually you usually get a higher weekly rent to compensate for the fact that it's short term , that would go a long way to solving your problem.

Maybe consider stayz.com.au, or contacting one of the corporate relocation companies.

 

[skater]

Do you realise that with a 5 month lease, there is no guarantee that they will leave at 5 months. If they don't move, and you have to go to tribunal to remove them, you risk your FHOG. This is too much risk IMHO.

I would suggest that you furnish the place and go for the short-term corporate market. Better tenants than students.

 

[Savanna100]

where abouts in Sydney are you??, I live in canberra but I actually need a 20 week lease in Sydney as I have been awarded a contract for a consultancy with a govt department and need to start about 10th August. if you are close to the CBD, I'm interested.

 

[Whozat]

If you aren't having any luck on the lease, you could take a chance on letting it out without a lease ie a periodic tenancy, and not making any mention to the tenants of the 5 month expectation. Might appeal to someone who is unsure of how long they need a place for. Has lots of drawbacks but it might get at least some rent coming in. Appropriate notice (2 months?) would need to be given if you wanted them to vacate by January though, and then they could easily turn around an leave a couple of weeks later.

 

[dajackal]

Do you realise that with a 5 month lease, there is no guarantee that they will leave at 5 months. If they don't move, and you have to go to tribunal to remove them, you risk your FHOG. This is too much risk IMHO.

I would suggest that you furnish the place and go for the short-term corporate market. Better tenants than students.

hey skater...thanks for this. the property manager found a tenant that has since signed the 5 month lease..they've been told up front that the owners are moving back in in January so they're quite aware of the situation.

If sufficient notice to vacate is provided what level of risk am I being exposed to?

Are you saying they may be squatting and I can't kick them out?