Market Rental Review

[sash]

Agree with bypassing the investment advisors....biggest parasites I have come up with very little value add.

I pay very little land tax under $750 last year as I have diversified across states.

Whilst commercial property is fantastic when the economy is doing well...it may also be the noose around your neck in times like this. But I digress....each to their own...I am happy with my strategy....it has returned handsomely for me.

I believe "so called" bottom feeding has also returned others on this site handsomely - Nathan, Jan Sommers, mystery, others.

It will be interesting to see who well Commercial properties fare over the next 18 months as the economy corrects...particularly in WA and QLD!

I understand the first home buyers market in most states is very buoyant! I tested the theory recently...unfortunately...all the properties I enquried about sold with 7 days.....those first home buyers are a tough crowd..LOL!!! Prices rises are next I believe.....in places like Melbourne's outer west you could buy under 200k.....i don't like peoples chances now.

Having initially started with residential Sashi I can vouch that it sucks..... You can continue if you like to play with state governments who have your hands tied behind your back, with the residential tenancy acts while they pick your pockets via land tax if you like.

From viewing your past posts you may have 12 properties but as it has been said before, "one good ASX 150 tenant in a commercial property who pays the single unit land holding land tax component plus all outgoings beats you hands down every time".

 

[Dazz]

This thread makes me map out how the market bursts --- greed and canning nature of some people

Cheer up chap. I presume you mean cunning. As my footy coach used to say "You're either on the ball or on the bus".


If the investment is ultra important to you and your family, and you therefore spend the time and energy to know the Lease contract inside out....and conversely your Tenant is huge with branches and therefore Leases all over Australia in every major town and city and frankly doesn't give two hoots about that individual Lease contract and subsequently falls asleep at the wheel.....


Well - you tell me - is that cunning and greed, or are they dopey ?? Depends which hat you prefer to wear I suppose.


I'm just about to lurch into this Landlording business full-time. It'll be my job, my only job, to know my defining and governing Lease contracts back to front and inside out. If that makes me greedy and cunning, well I'll be pleased to wear those labels that you wish to pin on me....and any others you wish to throw my way.

Alan Carpentor chose to go to the poll 1 month after Barnett was put in the liberal leadership.

No it wasn't - it was one day, not one month. The relevance of that political event to my Lease negotiation is pretty thin....other than to emphasise that timing is everything in contracts. Deadlines and timelines are given for a reason.

Read any court manuscript or any tribunal hearing, three quarters of it is all about timing. When did this happen, when was the notice given, when was the response received, how long did they rent for, how long is the lease, when did.....it goes on and on. To ignore time and the effluxion of the Lease milestones is to be negligently incompetent.

People chooses Chritmas time to pray for other people's ignorance. Does not matter how I am desperate to succeed, I would not choose down this road to succedd on greed or other people's suffering.

Wow - where do I start.

# 1 : The market review date was Feb 1.
# 2 : The Landlord was obligated via the wording of the Lease to give proper written notice to the Tenant "not less than 1 month prior to the market review date."
# 3 : That meant the notice had to be sent late December, I was obligated to send it then. I didn't write or sign the Lease. I bought the property with this exact wording. I'm just following the prescribed and agreed wording. They chose to ignore it.
# 4 : Other people's suffering and other people's ignorance ??? I don't know who you are referring to with this. I'm communicating with some nameless and faceless highly paid executive across the other side of the country whom I've never met, and is paid very handsomely to look after their interests on behalf of their multi-billion dollar organisation. If he is slack or incompetent, his organisation better have a good long hard look at themselves.


As I said previously, this means freedom to my family, and not a jot to them. I can assure you, if they are forced to pay the full rate proposed by myself, it won't cause them any suffering whatsoever.


This isn't some rundown old house with a poor down trodden single mother on a pension with 6 hungry kids at her feet we are talking about here. It's a concrete box on the premier business strip in the city, supporting a rather big cast of professionals. Anyway, you've made up your opinion it sounds like, so no point commenting further.

 

[Player]

Stick to your guns Mr. D and, let the multi-national tenant clean up the road kill on behalf of their exec/CFO who fell asleep at the wheel.

I doubt they would be crying tears of purple rain if the landlord was ill-informed or less than vigilant and veered off the motorway.

 

[steveadl]

Does not matter how I am desperate to succeed, I would not choose down this road to succedd on greed or other people's suffering. A win should be on a fair ground.

So what you're saying is, whilst the market rent for a property may rise 100% in a given year, and every other newly rented property is leased at this rate - you would leave your rent as it is or only increase it at a "fair" (by the way, who determines what 'fair' is - some tenants argue $10pw increase is not fair) rate so you don't cause any suffering? So it's better to have it in their pocket rather than my pocket just because I planned better and have investments?

It will be interesting to see who well Commercial properties fare over the next 18 months as the economy corrects...particularly in WA and QLD!

Like all investments Sash, some will flounder and some will prosper. Well positioned commercial property will continue to perform well and experience very low vacancy rates. For example in the Norwood retail precinct where I work, the values (and rents) are going nowhere but up - regardless of the current economic hysteria.

Dazz has some great commercial property, so don't lump him in with "we'll see what happens to the WA commerical market." Remember, he's only one guy with a few commerical properties that could prove to excel over the next year, and after all that's what this site is about - individual investors and their properties - Dazz doesn't own the entire Perth commercial market....... yet! If I had the resources, I would buy retail premises in my business area in a heartbeat - but I wouldn't necessarily be buying vacant industrial land at Aldinga. I couldn't care less what the "SA commercial market" would do for the next couple years, I know there's only one direction for that Norwood property.

 

[Horizon]

This thread makes me map out how the market bursts --- greed and canning nature of some people, such as lawyer. Politicans such as Alan Carpentor chose to go to the poll 1 month after Barnett was put in the liberal leadership. People chooses Chritmas time to pray for other people's ignorance. Does not matter how I am desperate to succeed, I would not choose down this road to succedd on greed or other people's suffering. A win should be on a fair ground.

Hi TheAnalyst,

Just to reiterate some of the sentiments that have already been put down. There is a lot of effort that is put into commercial contracts when setting up the agreements from both parties (and their counsels).

I am yet to play the part of the commercial landlord - but I am aspirational in this area - my wife would say compulsive I have, however been on the other side of the commercial IP table +5 times, and I can say that dates are indelibly inked into our diaries.

Our current business is currently providing services to other companies, and we must enter in contractual arrangements if not every, then every other week. All of our discussions start with we need to have an agreement that is commercial for both parties. The key word here is "commercial", as we all at the table are there to make a return for the shareholders of our respective companies, whether that be 1 person or 5,000. We look at the deal, negotiate and agree on the commercials. Then the legals come in and we learn to read marked up documents.

The point I am trying to make is that a commercial decision is just that.

Cheers,
Horizon

 

[capitalEyes]

small fish

What type of CIP's are there in the Gamma quadrant ??

Nothing too significant as yet. Market reviews won't see me retiring just yet, but will start to help prop up the negatively geared RIPs. Looking forward to biting off the next one.

Cheers
cE

 

[TheAnalyst]

Cheer up chap. I presume you mean cunning. As my footy coach used to say "You're either on the ball or on the bus".


If the investment is ultra important to you and your family, and you therefore spend the time and energy to know the Lease contract inside out....and conversely your Tenant is huge with branches and therefore Leases all over Australia in every major town and city and frankly doesn't give two hoots about that individual Lease contract and subsequently falls asleep at the wheel.....


Well - you tell me - is that cunning and greed, or are they dopey ?? Depends which hat you prefer to wear I suppose.


I'm just about to lurch into this Landlording business full-time. It'll be my job, my only job, to know my defining and governing Lease contracts back to front and inside out. If that makes me greedy and cunning, well I'll be pleased to wear those labels that you wish to pin on me....and any others you wish to throw my way.





No it wasn't - it was one day, not one month. The relevance of that political event to my Lease negotiation is pretty thin....other than to emphasise that timing is everything in contracts. Deadlines and timelines are given for a reason.

Read any court manuscript or any tribunal hearing, three quarters of it is all about timing. When did this happen, when was the notice given, when was the response received, how long did they rent for, how long is the lease, when did.....it goes on and on. To ignore time and the effluxion of the Lease milestones is to be negligently incompetent.





Wow - where do I start.

# 1 : The market review date was Feb 1.
# 2 : The Landlord was obligated via the wording of the Lease to give proper written notice to the Tenant "not less than 1 month prior to the market review date."
# 3 : That meant the notice had to be sent late December, I was obligated to send it then. I didn't write or sign the Lease. I bought the property with this exact wording. I'm just following the prescribed and agreed wording. They chose to ignore it.
# 4 : Other people's suffering and other people's ignorance ??? I don't know who you are referring to with this. I'm communicating with some nameless and faceless highly paid executive across the other side of the country whom I've never met, and is paid very handsomely to look after their interests on behalf of their multi-billion dollar organisation. If he is slack or incompetent, his organisation better have a good long hard look at themselves.


As I said previously, this means freedom to my family, and not a jot to them. I can assure you, if they are forced to pay the full rate proposed by myself, it won't cause them any suffering whatsoever.


This isn't some rundown old house with a poor down trodden single mother on a pension with 6 hungry kids at her feet we are talking about here. It's a concrete box on the premier business strip in the city, supporting a rather big cast of professionals. Anyway, you've made up your opinion it sounds like, so no point commenting further.

As I said, that was why the world has been screwed up by greedy people. One day, they will suffer the consequences (I am not saying you. the THEY is a generic term). This is not my own view -- every government's view and probably the majority people's view as well. Good luck.

 

[TheAnalyst]

So what you're saying is, whilst the market rent for a property may rise 100% in a given year, and every other newly rented property is leased at this rate - you would leave your rent as it is or only increase it at a "fair" (by the way, who determines what 'fair' is - some tenants argue $10pw increase is not fair) rate so you don't cause any suffering? So it's better to have it in their pocket rather than my pocket just because I planned better and have investments?



Like all investments Sash, some will flounder and some will prosper. Well positioned commercial property will continue to perform well and experience very low vacancy rates. For example in the Norwood retail precinct where I work, the values (and rents) are going nowhere but up - regardless of the current economic hysteria.

Dazz has some great commercial property, so don't lump him in with "we'll see what happens to the WA commerical market." Remember, he's only one guy with a few commerical properties that could prove to excel over the next year, and after all that's what this site is about - individual investors and their properties - Dazz doesn't own the entire Perth commercial market....... yet! If I had the resources, I would buy retail premises in my business area in a heartbeat - but I wouldn't necessarily be buying vacant industrial land at Aldinga. I couldn't care less what the "SA commercial market" would do for the next couple years, I know there's only one direction for that Norwood property.

1. I have never said you should not ask the 100% rise.
2. Re commercial / industrial property, I only gave my view. Different people on this forum have different view. I gave my facts, such as recent publish of 120000m2 office space with 37000m2 approval. You put a simple calculation: assume 100m2 for a small office, it will have additional 1200 offices to occupy in such a small city under current 1 in many years economic cricis --- Does it tell you anything? or not. I am just honest to provide my opinion to those interested to judge themselves.
3. recently, I am looking into buying business. I found one thing in common for these business to sell --- the rent is way too high and no way they can make any money. Who will be the loser eventually, the landlords. They screw up the tenants. The business is closing and the buyers just not interested because the figures could not work out.

 

[TheAnalyst]

Hi TheAnalyst,

Just to reiterate some of the sentiments that have already been put down. There is a lot of effort that is put into commercial contracts when setting up the agreements from both parties (and their counsels).

I am yet to play the part of the commercial landlord - but I am aspirational in this area - my wife would say compulsive I have, however been on the other side of the commercial IP table +5 times, and I can say that dates are indelibly inked into our diaries.

Our current business is currently providing services to other companies, and we must enter in contractual arrangements if not every, then every other week. All of our discussions start with we need to have an agreement that is commercial for both parties. The key word here is "commercial", as we all at the table are there to make a return for the shareholders of our respective companies, whether that be 1 person or 5,000. We look at the deal, negotiate and agree on the commercials. Then the legals come in and we learn to read marked up documents.

The point I am trying to make is that a commercial decision is just that.

Cheers,
Horizon

At current market, it is better to treat tenants nicely and have a long term view.

 

[nonrecourse]

As I said, that was why the world has been screwed up by greedy people. One day, they will suffer the consequences (I am not saying you. the THEY is a generic term). This is not my own view -- every government's view and probably the majority people's view as well. Good luck.

What you are actually alluding to is part of a mathematical theory called Pareto's Law. In a nut shell 20% of any activity produces 80% of the results. As for investing or providing for yourself 80% of the population will retire on the pension.

Guess what most of that 80% (I am not saying you. again its generic) think that the other 20% are greedy. In the next twenty years we are going to see that 80% vote to take away the 20% non taxable retirement benifits.

 

[chilliaa]

What you are actually alluding to is part of a mathematical theory called Pareto's Law. In a nut shell 20% of any activity produces 80% of the results. As for investing or providing for yourself 80% of the population will retire on the pension.

Guess what most of that 80% (I am not saying you. again its generic) think that the other 20% are greedy. In the next twenty years we are going to see that 80% vote to take away the 20% non taxable retirement benifits.

On this point i think you may have a point. How do you 'insure' against this?
Once your net wealth is sufficient you diversify by allocating money in different countries. That way from each country's perspective you are small fish and can fly under the radar.
There is no point bleeting about the system, one person, one vote means that an individual cant change the system, the system will always flow towards the wishes of the majority. So if you cant change the system, make the system work for you.

 

[steveadl]

1. I have never said you should not ask the 100% rise.

My point was you were insinuating Dazz is greedy because he's putting up the rental by 220%. Why is that greedy if that's what the market rate is now?

(if I misunderstood you and that's not what you were saying, then forgive me - but don't come back with "i wasn't talking about Dazz" about your comments in a thread specifically discussing his market rental review)

 

[TheAnalyst]

My point was you were insinuating Dazz is greedy because he's putting up the rental by 220%. Why is that greedy if that's what the market rate is now?

(if I misunderstood you and that's not what you were saying, then forgive me - but don't come back with "i wasn't talking about Dazz" about your comments in a thread specifically discussing his market rental review)

I have no idea what you are defending. Most of people (not you, of course), it was the greed (mainly) which caused current problem. If you were one of them, good on you! I have said it was the greed (landlords on lease) which have caused so many small business to sell (but nobody wants to relay the hot potato of high rent). Eventually those greeds would suffer themselves: business close, nobody want to lease. (I am not saying, yours. You may be a genius on commercial properties). All I want to say, DONOT be too greedy otherwise everyone suffers.

 

[goodmorningaus]

i dont understand what people are objecting to. business is business and if the shoe was on the other foot i dont think you would see the multi national worrying over the morality of it all.

the only concern i would have is whether or not the business would remain viable (esp. in this climate) with the rent hike. if one is prepared to look for a new tenant if they decide to fold up shop and move on then why would you not stick to your guns and go for the full rent? presuming the new rent really is a fair reflection of market rent it would be foolish to willingly accept less.

if this were a residential property or a mom and pop business... well sure, there are ethical issues involved and popping a 220% increase on someone while they are away on holiday would be a crappy thing to do. but business is business and if their people aren't on the ball... well, that's their fault, isn't it? if they screw up a little its their fault. if they screw up a lot its the government's fault. no wait, that's the US...

good luck to you and i wish you a happy and healthy retirement!

 

[PrimeCommercial]

Anyone care to get back on topic?

 

[steveadl]

I have no idea what you are defending. Most of people (not you, of course), it was the greed (mainly) which caused current problem. If you were one of them, good on you! I have said it was the greed (landlords on lease) which have caused so many small business to sell (but nobody wants to relay the hot potato of high rent). Eventually those greeds would suffer themselves: business close, nobody want to lease. (I am not saying, yours. You may be a genius on commercial properties). All I want to say, DONOT be too greedy otherwise everyone suffers.

And there's the point again - to me you're saying commercial landlords shouldn't increase to market if that increase is considered 'greedy.' My LL recently just increased my rent over 20% (originally wanted over 25%) which is a decent hit from one month to the next - should he have been 'nice' and only increased it by 5-10%?

It's not his problem if my business is not strong enough to cope with the increasing rent. If it's not, that's my problem, I'll have to vacate and he'll move in a business that can afford the rent because they run a better operation. This is why you see many of the 'mom and pop' stores close and gradually replaced by large corporates and franchises when an area becomes popular .

Sure it's not 'nice', but that's the way of the business world. Hence why I can't understand where you're coming from. Now if my LL increased my rent so that it was 30% ABOVE current market rates, then I think you have a valid argument. I do not think increasing rents TO market rate is greedy. And if you can't understand that, then I guess we'll have to agree to disagree!

 

[TheAnalyst]

And there's the point again - to me you're saying commercial landlords shouldn't increase to market if that increase is considered 'greedy.' My LL recently just increased my rent over 20% (originally wanted over 25%) which is a decent hit from one month to the next - should he have been 'nice' and only increased it by 5-10%?

It's not his problem if my business is not strong enough to cope with the increasing rent. If it's not, that's my problem, I'll have to vacate and he'll move in a business that can afford the rent because they run a better operation. This is why you see many of the 'mom and pop' stores close and gradually replaced by large corporates and franchises when an area becomes popular .

Sure it's not 'nice', but that's the way of the business world. Hence why I can't understand where you're coming from. Now if my LL increased my rent so that it was 30% ABOVE current market rates, then I think you have a valid argument. I do not think increasing rents TO market rate is greedy. And if you can't understand that, then I guess we'll have to agree to disagree!

I do. That is why the world has been screwed up, that is why so many small business are going out of the door. I can see soon these commercial / office will drop 50% in "value". If everyone had some decent thinking, the world would not have been screwed up.

 

[TheAnalyst]

Also, rember the recent president of American stock exchange scandal. I do not hold any sympathies to those investors, they deserve it -- because they are too greedy. I saw cllapse of property developers and finance brokers, people lost millions of dallars and retirement money, I do not have sympathy toward them -- they are too greedy. I lost a lot of money in shares, I do not blame anyone but myself (although it was the company's deception on the stocks, they lost the case in Federal Court). I learnt from the lessons.

 

[steveadl]

I do. That is why the world has been screwed up, that is why so many small business are going out of the door. I can see soon these commercial / office will drop 50% in "value". If everyone had some decent thinking, the world would not have been screwed up.

Wow, ok. This coupled with your other responses in this thread is enough for me to leave it at that. Have a nice day.

 

[Dazz]

Anyone care to get back on topic?

I'm hoping that JoannaK, as the moderator for this sub-section, shall waltz along anytime soon, and take a very wide broom to this schamoozle.

I was intending this thread to be a good reference point for the forum on how a standard rental market review on a CIP is conducted.

A market rental review is the "bright spot" for any Landlord within this industry, and I assumed people interested in property investment would be interested in how an actual review was conducted, rather than read one little paragraph in some theory textbook that doesn't exist.

Sigh.....