No tenants in 2 of 3 IP's... What would you do?

[MissMuffitt]

Ok, we have found ourselves in a bit of a pickle!

1/Tenant on 12 month lease has vacated after 4 months as he lost his job.He has now moved to Sydney/Melbourne. Our PM has told him that he is still responsible for the rent until we find a new tenant to take over the lease. He has continued to pay the rent for the last month, but what if he closes that account and we can't get rent from him? Property is in Gladstone QLD and there have been a lot of workers put off from Comalco. Prospects for tenant is not good as there are a lot of properties at the moment on the rental market because of the above.
2/ No tenant in Agnes Water property as she moved after her 6 months lease expired to a bigger property for her kids.

My question to you all is this... What would you do to encourage people to look at your properties?

Any bright ideas about our current problems would be appreciated.

 

[rugrat]

First thing I would do is reassess my pricing, make sure that it remains competitive with the other rentals in the area.

 

[MissMuffitt]

spoken to both PMs

I have spoken to our PM in Gladstone and told him that we would like him to put the price down by $20 a week, so that would be $330.
He has said that as long as the previouse tenant is still paying the $350 we should not do anything yet. Wait till we get some interest and then let the prospective tenant mention a decrease and go from there.

The Agnes water PM also said the same thing, to let the prospective tenant think that it was there idea about a decrease in rent...
Agnes will go down from $250 to $230 if we can get a tenant.

 

[our obsession]

We have landlord insurance, (Victoria investors btw), which covers rent default, so if a tenant breaks the lease and disappears our insurance covers rent until new tenant insitu.

Having said this our places rent quickly, there is a strong demand for well presented properties in the regional Victorian towns and cities we invest in. We get premium rent for well presented/situated IP's.

I don't necessarily take the rent default with all tenants, I make an asessment of which IP's should have the cover or not..Our longer renting, on time, looking after things well, people, are not insured for rent default or malicious damage, I weigh and balance the risk(s).

 

[rugrat]

I have spoken to our PM in Gladstone and told him that we would like him to put the price down by $20 a week, so that would be $330.
He has said that as long as the previouse tenant is still paying the $350 we should not do anything yet. Wait till we get some interest and then let the prospective tenant mention a decrease and go from there.

The Agnes water PM also said the same thing, to let the prospective tenant think that it was there idea about a decrease in rent...
Agnes will go down from $250 to $230 if we can get a tenant.

hmmm... I can see where your pm's are coming from, but whenn I was a renter I wouldn't even look at any properties if they were over my limit. Most people don't negotiate in western society, they just take prices at face value. What has the interest been like? If there has been no interest at all, I would suggest that using the tact of 'rent negotiation' wouldn't work - because you have no-one to negotiate with.

 

[Propertunity]

Property is in Gladstone QLD and there have been a lot of workers put off from Comalco. Prospects for tenant is not good
2/ No tenant in Agnes Water property as she moved after her 6 months lease expired to a bigger property for her kids.....Any bright ideas about our current problems would be appreciated.

This is one of the primary reasons that I advise ppl not to invest in smaller population centres or places with just one industry or just holiday locations. Sure it is great when everythig is booming but good times never last forever.

What would you do to encourage people to look at your properties?

The answer is the same during all parts of the cycle in all places.
1. Make the property attractive to tenants. Pay attention to presentation. Look at all the things that tenants see, touch and smell during inspections:
- clean
- paintwork - update colours perhaps?
- kitchens - sparkling clean and smells good (lemon?)
- bathrooms - same
- attend to minor repairs
- light fittings / switch plates
- decorate to the market's taste - not your own
- mulch gardens
2. Offer 2 weeks rent free perhaps?
3. Allow pets - make a point of it in the advert. "Pets welcome"

 

[MissMuffitt]

We have landlord insurance, (Victoria investors btw), which covers rent default, so if a tenant breaks the lease and disappears our insurance covers rent until new tenant.

Thanks for that info, I do have landlord insurance with CGU but didn't think of the rent being paid for as long as it takes to get a tenant, if he stops paying that is!

On another note... when do I have to notify the insurance that the properties are empty, is it 6 weeks of no tenant??

Thanks again for all your ideas.

 

[lizzie]

He has said that as long as the previouse tenant is still paying the $350 we should not do anything yet. Wait till we get some interest and then let the prospective tenant mention a decrease and go from there.

it's been a month and there is no interest ... i'd be putting the rent down and get someone in - can always put the rent back up down the track, but at the moment you're not just losing $20-50/wk by asking for a lower rent - you're losing $300-320/week because there is no one in there on a lower rent.

 

[Nathan]

Tenant insurance is imperitive.

 

[ernie]

I'd drop the rents. Better to have a tenant paying less than expected than no tenant at all.

+1 to what rugrat said. I did the same thing (not look at properties advertised above my budget) when I was a tenant.

 

[MissMuffitt]

I have just gotten off the phone to the PM in Agnes... I mentioned to her again about putting the price down and she said that we should hold off a bit longer. I explained that we really need this place tenanted very soon! and she said that there was a guy who was looking for a place but only if it was $200 a week. I said no... too much of a discount, sorry.(Should I have accepted that much discount??)
She tells me that the DeSalination plant is set to go ahead in July. So that is good news. I will wait a bit longer and then I will defiantly say Put the price down to $230.

 

[aaarghhh]

On another note... when do I have to notify the insurance that the properties are empty, is it 6 weeks of no tenant??

Your PM should answer this. The insurer will liaise with your PM as they put a report together for the insurance event.

 

[fokas]

I mentioned to her again about putting the price down and she said that we should hold off a bit longer. I explained that we really need this place tenanted very soon!

Sorry who owns the house? If you want your property advertised at a lower price then get it advertised!
It's been over a month and your property manager hasn't got a tenant yet?

Change of tactics imo. I'd be telling my PM to politely do as I asked.

 

[graisme]

have you tried listing your props with more than one agent? that way you don't have to accept their word all the time.

 

[MissMuffitt]

Ok... just rang Gladstone PM, we are going to drop it to $330 and it will be a featured property on RE.com.au
No problem with them dropping the price, no ifs buts or maybes.

Might ring back Agnes PM and tell her to do the same regardless of the Desal plant in July, I need it tenanted NOW!

 

[Sheryn]

Ok... just rang Gladstone PM, we are going to drop it to $330 and it will be a featured property on RE.com.au
No problem with them dropping the price, no ifs buts or maybes.

Might ring back Agnes PM and tell her to do the same regardless of the Desal plant in July, I need it tenanted NOW!

Miss Muffet
1. Both properties should have already been advertised on www.realestate.com.au IMHO
2. Are you allowing pets - my previous experience as a LL is IP with pets allowed rent quicker / easier than no pets.

 

[MissMuffitt]

Both down in price now...

Both properties are in realestate.com.au and have been since before the tenants left.
Both properties have had the prices cut, Gladstone from $350 down to $330. Agnes Water from $250 down to $220 and show as such on RE.com.au.
Gladstone house I am allowing cats, but not dogs. Agnes is a dulpex and does not have the room for pets, but I might change that to small pet perhaps.

Here are links to the 2 properties.
http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=32582973&s=qld&tm=1242683695

http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=45324913&s=qld&tm=1242683739

 

[Edmond Dantes]

The description for the Agnes property still says $250. I'd get that fix as well.

 

[MissMuffitt]

The description for the Agnes property still says $250. I'd get that fix as well.

Ok, rang her and asked her to fix that too, it was in the body of the add so that shouldn't be too much hassle.
However, the "Show visits" for the Agnes property is showing over 500.
She told me that it can't be reset?? does this sound right to you... If you have to advertise every 6 months for a new tenant shouldn't the counter be reset each time back to 0 ??

 

[Pecan]

Hi Miss Muffit
The "show visits" feature shows you how many people have looked at the ad on line. 500 people have viewed the ad. She is correct, the agent cannot reset that. It doesn't include people that looked at the ad 6 months ago, just since it was put on re.com.au this time (four weeks I think you said?).