Introduction...and a question about taking over a lease

[Banked]

Hi all,

Couldn't find an introductions section so I thought here was as good as any. First of all let me start by saying how impressed I am with the content on this forum and everyones willingness to help others. Its great to see and hopefully some time soon I'll have more to contribute.
My wife and I have been doing research for our 1st IP over the past 5 months, and we've finally had an offer accepted.....won't know what to do with myself on weekends now

We purchase our first home (I'm sure there's an acronym for that, but anyway) in 2001, so we were pretty lucky with great equity gains in the 1st 1-2 years.

We started looking for an IP in the inner west of Melbourne (Footscray/Seddon), but after about 4 months we started to realise that it was begining to become well over priced (IMO) and we'd be crazy to buy our 1st IP in such a competitive market. So we started looking elsewhere and Mornington Peninsula caught our eye. Within 2 weeks we'd found a place that met our criteria, signed the dotted line and hopefully it all works out.....we've done all the sums and research, but we can be a little impulsive at times.

What a massive difference in market places. You really have to take on a different mind-set and instead of making offers 10-15% above asking prices, make offers 10-15% below what's being asked....what a crazy experiance. And my faith in REA is starting to be restored (well maybe just a little).

The property we have purchased is already being rented and I believe that the tenent wants to stay on. Does anyone have any advice or tips for dealing with this??

 

[buzzlightyear]

Congratulations on you purchase

We purchase our first home (I'm sure there's an acronym for that, but anyway)

Principle Place of Residence (PPOR)

The property we have purchased is already being rented and I believe that the tenent wants to stay on. Does anyone have any advice or tips for dealing with this??

Is the tenant currently on a fixed-term lease or month or to month? I would just make sure that you are getting fair market rental return. Have a chat to the property manager about the tenants, any issues, the rental market and validate what they plan to charge you and how they operate (as much for your information)

I recently purchased in the same vicinity (settle next month), and I had the PM actually ring me two weeks ago to ask what I plan to do with the management of the property when I take possession. I liked that pro-activeness. It was a good first impression.

won't know what to do with myself on weekends now

Here's a suggestion, start reseraching for the next one!

 

[The Y-man]

The property we have purchased is already being rented and I believe that the tenent wants to stay on. Does anyone have any advice or tips for dealing with this??

In addition to Buzz's advice above, was the propoerty in good nick for the opens etc? It gives a good indicaiton to the type of tenants they are (a tenant from hell would generally leave the place looking like a bomb site during opens etc - unless they got heavily bribed by the vendor). If they seem to have nice furniture and looking like they take care of the place, it would be good to keep them on.

Cheers,

The Y-man

 

[steveadl]

I'm in the same position at the moment - settling on a property with tennants wanting to stay.

My advice would be to find a Property Manager(PM) you like first - doesn't have to be the PM that currently manages the property. Either way, once you have found a PM, let them do the work - tell them the situation ie. the tennant wants to stay, then give them all the details and tell them to go to work straight away ie, before settlement.

That way come settlement day you know what's going on ie. whether you are going to keep these tennants or find new ones, and how much the rent will be etc.

Couple of quick tips - if the PM is going to keep on the current tennants, negotiate a lower letting fee eg. 1 weeks rent instead of 2, as there is less work for them. Also, when the contract expires, or if you are starting a new contract with the tennants - make sure you are getting market rent, so put it up if you have to. And if they are staying on, you can probably put it up and extra $5-$10pw regardless, people don't move houses for only $5pw - but that already gives you an extra $260pa to offset against the PM's fees.

Cheers
Steve

 

[Banked]

Is the tenant currently on a fixed-term lease or month or to month?

Cheers Buzz.
Month to month contract and the tenant is a friend of the vendor so they are paying (from what the REA told me) about $40 below the weekly market rate.

 

[wylie]

I self manage, so I don't know the ins and outs of this, but in this case, I would definitely get your PM to give the appropriate notice and get the rent up to market rates. They may be friends of the vendors, but you need to get market rates.

Wylie

 

[Banked]

In addition to Buzz's advice above, was the propoerty in good nick for the opens etc?

This is an interesting one....
From what I understand its a single mum with a couple of kids, and the place was quite messy. Toys and stuff all over the place. Now my wife and I are DINKs (is that right? ) so I'm not sure if this is normal, but the house was not dirty. The kitchen and bathrooms were clean, and in pretty good nik. So I would assume they would be OK?

 

[The Y-man]

This is an interesting one....
From what I understand its a single mum with a couple of kids, and the place was quite messy. Toys and stuff all over the place. Now my wife and I are DINKs (is that right? ) so I'm not sure if this is normal, but the house was not dirty. The kitchen and bathrooms were clean, and in pretty good nik. So I would assume they would be OK?

oooooo.......not sure about this one, especially when you said she was a friend of the vendor.... is there a PM involved, or was it just rented on a "friend basis"?

Check to see if she has been on time with rents etc (a PM has to keep this detail...)

Cheers,

The Y-man

 

[buzzlightyear]

Cheers Buzz.
Month to month contract and the tenant is a friend of the vendor so they are paying (from what the REA told me) about $40 below the weekly market rate.

I'm excited for you. Did you know that before you purchased?

Obviously the way you ie PM handles the transition to 'market rent' for the tenant needs to be done professionally. (assuming that you want the extra$40pw )

 

[Banked]

Y-man - The property is currently managed by the vendor, so I'm not 100% on what they have in place at the moment. I'm thinking that I should get a PM on board ASAP to start sorting this out before settlement. From what I've been told all payments etc have been made on time.

Buzz - I'm excited too Hopefully I can keep the momentum going...think I've got the bug now. I had a feeling the rent was under market rates at the time, but having this confirmed is great....esp when there is an undersupply of rental properties in the area

 

[The Y-man]

. I'm thinking that I should get a PM on board ASAP to start sorting this out before settlement.

Yes, absolutely. As soon as it settles, you really want a condition report done, and a lease drawn up.

Cheers,

The Y-man

 

[jingo]

This is an interesting one....
From what I understand its a single mum with a couple of kids, and the place was quite messy. Toys and stuff all over the place. Now my wife and I are DINKs (is that right? ) so I'm not sure if this is normal, but the house was not dirty. The kitchen and bathrooms were clean, and in pretty good nik. So I would assume they would be OK?

We used to be dinks too!!! Now, as a father of a 3 year old that would sound about right to me. You should come to our house!!! Its as messy as can be at times. Although it gets cleaned from top to bottom once a week!