Long Tenancy Rights

[bawley]

Hello forumites, I have missed slipping in here over the past couple of weeks - happy 2 5 to all.

A friend has just bought first investment property and has been advised by other friends that after the first 12 months lease expires it is advisable to not renew and have tenants on "month to month". They said that if they are there for long periods they have "long tenants rights", and that you can have all sorts of dire problems in removing them if it becomes necessary to do so.

I have only been learning and listening for the past couple of years but haven't heard of this before. Recently talking to my pm in Brissy who suggested that my tenants just go month to month after expiry of lease, but I insisted on new lease - have I done the wrong thing??

 

[Aceyducey]

Baw;ey,

No right or wrong there.

Month to month is fine if the tenant is reliable, there is a good supply of tenants (low vacancy rates) & you're happy with the situation.

A lease is like a contract for a company, it gives you more sureity that there will be a tenant in place paying a set amount - risk mitigation. Particularly useful in areas with high vacancy rates or sliding rentals.

'long tenant rights' - well these'd be the same if the tenant were month to month or on leases wouldn't it?

Go the 30 year lease!

Cheers,

Aceyducey

 

[bawley]

Thanks Acey

Anecdotally (is this a word?), my friend purchased 2bedroom/2bathroom new townhouse in Gungahlin and decided to self manage as she lives in same area So she advertised on allhomes ($60) for tenant and received 12 phone calls in first 24 hours. (rent, $300pw. purchase price $306k).

Bawley.

 

[geoffw]

Month to month after 12 months has been normal on my ACT leases. It can work both ways.

I had a rent rise after 12 months on one property- the tenant negotiated down slightly in favour of a new 12 month lease. This quite suited me, as I needed the stability at the time.

 

[Hulkster]

My landlord insurance policy requires a lease to be in place to cover tenant damage - month to month isn't necessarily considered a lease, so may be worth checking this.

 

[Kerri]

From my understanding, a month to month agreement is called a "periodic lease".

If I had a good tenant, and they were willing to sign one, I would have as long a lease as possible. It would give both myself and the tenant a feeling of security. I think banks etc. are more liberal in assessing rent as income if there is a lease in place, which can be very handy if you're trying to refinance or get finance for further investment.

 

[Jacque]

Depending on the tenant, I would ideally prefer a long term lease, as most of my properties are going to be kept for a long time yet! However, a periodic lease can be handy if you want vacancy periods to renovate/kick out an undesirable tenant/sell. Just make sure you increase the rent a little with each 12 mth lease so that you don't fall so behind the market!

 

[crest133]

Hi Bawley
There are no additional tenant rights which come into effect after 12 months or longer, other than what tenants have in the first lease. Hell, they have more than enough already, and always more than the landlord.
cheers
crest133