Lease Renewal or Periodic?

[TMNT]

just wondering what people favour once the initial 12 months is up

Im tending towards going for a periodic

because, I dont get charged the 1-2 weeks releasing fee,

if the tenant was going to stay they would normally stay regardless of lease or not,

as for locking them in for another 12 months, if they want/need to leave, they will leave anyway, the only differnece is they wont be up for break lease costs,

what does every body do/think?

or will it depend on if there is a rent increase, and if so would a rent increase on periodic not go down well

 

[norwoodman]

You'll want to check that your LL insurance policy will cover you for periodic tenancy if you go down that path... a lot don't. Then there's also the costs associated with getting new tenants in/having a vacant property if the tenants do leave that you'll need to consider - advertising fees, cleaning fees, no income from the property.

The costs of going periodic might seem less by not rolling over into another fixed term, but the costs of having a vacant property and getting new tenants would be even higher.

 

[thatbum]

I tend to like periodic leases for similar reasons as you describe. The only issue with them might be your landlord's insurance, but I don't really use any so it works for me.

or will it depend on if there is a rent increase, and if so would a rent increase on periodic not go down well

Not sure what you mean about rent increase being a factor?

 

[westminster]

The other pro for a lease is that Banks like them.

 

[TMNT]

I tend to like periodic leases for similar reasons as you describe. The only issue with them might be your landlord's insurance, but I don't really use any so it works for me.



Not sure what you mean about rent increase being a factor?

As in if you were going to increase rent in my experience it's usually been accomplained with a lease when there is a rmental increase

I get the vibe increasing the rent on a periodic leaves a bit of w bad taste instead of a lease as I guess you could increase it twice or three times within twelve months it there ie no lease

 

[thatbum]

I get the vibe increasing the rent on a periodic leaves a bit of w bad taste instead of a lease as I guess you could increase it twice or three times within twelve months it there ie no lease

The WA Act only allows an increase once every 6 months - its the same whether its fixed term or periodic lease.

Increasing the rent will be easier on a periodic lease after the new provisions come in 1 July this year. From then on, any rent increases during a fixed term will need to be either a fixed amount specified on the lease, or at least the method of calculating the amount needs to be specified. No more generic "rent review" clauses.

 

[Joe D]

With a periodic you are not in control of when they can leave. Just wait until they give you minimum notice just before Xmas and you are left trying to lease your property at the worst possible time.

No thanks, I will only ever use fixed leases unless the tenant has requested an extra month or two after a fixed expiry date.

 

[Aaron_C]

I think in Victoria you can't force a tenant to go on a new lease once the original one is expired. So it is quite moot.

 

[Ed Barton]

With a periodic you are not in control of when they can leave. Just wait until they give you minimum notice just before Xmas and you are left trying to lease your property at the worst possible time.

No thanks, I will only ever use fixed leases unless the tenant has requested an extra month or two after a fixed expiry date.

There's little difference between a fixed lease and periodic. Either one can leave at any time. A fixed is up for more responsibility, on paper. In reality the two are very similar.

Still, it's best to hammer down a tenant to fixed so they feel like they have more responsibility.

 

[Joe D]

I think in Victoria you can't force a tenant to go on a new lease once the original one is expired. So it is quite moot.

If a tenant can’t or won’t sign a new lease prior to the old fixed leased end date, then at that time I will instruct my Vic PM to issue a 120 day Notice to Vacate. This then forces tenant’s hand to either:

• Re-sign new fixed lease
• Vacate the property per 120 day notice

It may sound extreme and pointless but it does allow me to have some control over end date (break leases excepted).

On WA periodic leases a tenant only has to give 21 days notice but a landlord has to give 60 days.

 

[Lil Skater]

If a tenant can’t or won’t sign a new lease prior to the old fixed leased end date, then at that time I will instruct my Vic PM to issue a 120 day Notice to Vacate. This then forces tenant’s hand to either:

• Re-sign new fixed lease
• Vacate the property per 120 day notice

A tenant can still challenge the notice, and if taken to VCAT it is unlikely to stand up.

OP - If you have a good tenant I usually suggest to offer a further 12m lease, unless the property is under market.

Check on your landlord insurance, and if it does not cover periodic leases change your cover. Other than that periodic is only a pain if/when your tenants decide to vacate.

 

[tobe]

and cross out your 1 to 2 week re letting fee in your management agreement.

 

[morg]

/\ /\ /\ What he said.
This should only apply when new tennants move in, if at all.
I know, WA PMs love their letting fees.

Personally, I only go fixed term leases. Same reasons as above ie. insurance concerns and that teeny bit of control over when the lease expires.
My approach, as above, sign it or get out.

 

[TMNT]

back to the old debate again,
my agent charges 2 weeks letting, and 1 week reletting which I personally think is insane, but unfortuantely, so does everybody else so I get the "oh we have rent to pay " type response,

however, the agent called me and said that they would do $100 reletting fee, which pretty much halves my reletting fees at rent of $220 per week

I also got the sales spiel of commitment, easier insurance claims, better insurance coverage

me thinks that its a way to drum up more business, since the tenants have been on a periodic for about a year now,

my argument is that if they are going to leave, they will leave anyway especially the demographics of the area

theyve been generally quite good, no arrears, just a few compaints from neighbours about the noise and the mess in the front yard

decisions decisions decisions

 

[thesuperman]

and cross out your 1 to 2 week re letting fee in your management agreement.

Exactly..... Why would anyone pay the agent another 1 or 2 weeks reletting fee for them just signing another piece of paper with the tenant that's already renting the property?

 

[S.T]

I wonder if you could have them sign your own lease and the PM manage the property then, saving the re-letting fee? Just copy the previous lease yourself with dates changed. Would be the same as them taking over an existing lease kind of? Might be worth a try.

 

[wylie]

As someone who self manages, this is the time when I think "phew... just saved myself $560 by spending all of two minutes changing the dates on the old lease and printing it out again".

Seriously, I agree there is work to be done when they are opening the house to show prospective tenants (even though it is only for 15 minutes twice a week) and doing up the entry condition report, checking out the tenants etc, but to charge one week's rent for changing two dates and printing out the form. I'm guessing the tenant goes to their premises to sign. They don't have to even get in their car to earn the easiest money. They don't even have to type up a new one. Such easy money, and it goes into MY pocket.

 

[TMNT]

exactly, Im happy to pay a lease prep fee of $30 like many agents around the country, which might take all of 15 mins
but paying up to a weeks rent plus gst is ludcrious

i can pretty much guarantee that if I bought in my own lease, they'll give me some BS excuse like, they are only allowed to take over leases prepared by themselves,

until they reduce their release fees, all my leases are going to be periodic

 

[wylie]

until they reduce their release fees, all my leases are going to be periodic

This can be an issue with insurers, however, with our recent move to Youi (PPOR, IPs and vehicles), we recently had an issue where we didn't want to renew a fixed lease, but allow it to roll to periodic. Youi were happy to continue to insure in these circumstances and made a note on our policy to this effect.

 

[S.T]

i can pretty much guarantee that if I bought in my own lease, they'll give me some BS excuse like, they are only allowed to take over leases prepared by themselves,

Why don't you ask the question and see?