Proactive PM or not?

[tess85]

So I just noticed I haven't raised the rents on an IP for a while. Got in touch with the PM and basically said:

In August last year the rent was raised from $275 pw to $285 pw.
Is there any scope for a $5 pw to $10 pw rent increase? Could you please review and let me know.
By the way, are the tenants on a 12 month lease at the moment? Please remind me of the lease expiry dates.

I received a reply saying:

Yes there fixed term has ended which means there in a continuous period in which all the rules and laws from the original lease still apply but they are not bound by a contract in terms of having to pay a fee when they give notice to move out they only have to give us 21 days written notice in order to vacate.

Kind Regards, <PM>

So here's the thing. Are they a bit slack by not letting me know the fixed term was up? My other PMs always tell me beforehand and do a rent review. Wonder what I'm paying these guys for, if they don't even tell me the fixed term is up nor do a rent review. If I hadn't been thinking "hmmm been a while since I raised the rent on this place" I wouldn't have noticed it...

Anyone have a good PM in Mt Druitt they can recommend?

 

[thatbum]

A little bit slack I suppose, but I'm surprised you didn't keep a track of the fixed terms on your rental?

 

[miss green eyes]

tess - have PMed you.

 

[womble66]

I received a reply saying:

Yes there fixed term has ended which means there in a continuous period in which all the rules and laws from the original lease still apply but they are not bound by a contract in terms of having to pay a fee when they give notice to move out they only have to give us 21 days written notice in order to vacate.

Kind Regards, <PM>

+1 Find a new PM. Sorry can't recommend any one but here is what my reply would be:

Yes thanks for the rent review. Please accept this as notice to terminate your services IAW the current MAA. A new PM will be in touch to collect the file.

Kind Regards, <LL>

 

[Tyla]

That's not good. you may want to review your LL insurance policy too. I read somewhere that some policies don't cover or only cover reduced liabilities if the tenants are on month to month. sorry i can't give you specifics.

 

[miss green eyes]

That's not good. you may want to review your LL insurance policy too. I read somewhere that some policies don't cover or only cover reduced liabilities if the tenants are on month to month. sorry i can't give you specifics.

Yes. They cover the rent loss as per the agreement.
Normally, for tenancy at will, it's 3 weeks notice in NSW.
So, I guess, you're covered for 3 weeks loss of rent.
That's IF they cover you if you're not on a fixed lease - some insurers don't.

 

[serendip]

I find it interesting that people are down on PMs for not increasing rent or renewing leases. I honestly thought particularly not renewing leases was the norm. I rented for about 15 years & in that time never had a lease renewed & only a single rent increase. I did move quite a lot but still....

 

[property_girl]

I am confused: didn't you recently increase the rent? I have had IPs for 30+ years and my PMs hardly ever let me know when the fixed term tenancy is about to end. Should they?

 

[travelbug]

Some of mine notify me that contracts have ended, some don't but then again I haven't asked them to. If the tenant requests to sign a new lease then they ask me if its ok to renew.

What I do expect though, is the property report checks. Some agents can be slack with that.

I have only ever have one suggest a rent increase.
I usually check every 6 months to see how rents are sitting. It only takes half an hour to do a check of your areas on re.com to see what for rent similar to yours. If necessary I send an email advising that I want rents increased. Or I ask if a rent increase is warranted.

 

[D.T.]

Good service, in my opinion, would be keeping on top of both a) When leases expire to ensure properties always have fixed leases to ensure continuity of income, and b) keeping on top of market rents/vacancies in order to obtain optimal returns.

 

[Salvatore1]

Not a proactive PM. I print a report each month which informs me when rents are to be reviewed, normally yearly anniversary. As we need to give the tenant 60 day notice + postage off an increase, I call each LL 2 and a half months before review date. At this point we decide if we are increasing the rent and signing a new lease or allowing it to flow into a continuous lease. Not hard to do but you need to ensure you are organised and proactive. I developed a report in Console that produces the report for me.

 

[Scott No Mates]

A rent review doesn't necessarily result in a rent increase. Funny concept. A review opportunity means that the pm looks at rent, market conditions, quality of the tenants etc then recommend whether a rent increase, maintain current levels or other action is required. It also includes whether to offer a new lease, continue on periodical or serve notice to terminate.

 

[Jaggannath]

Definitely slack... at the least, they should be saying the fixed term is up, do you want another fixed term? At the same time they should be suggesting an appropriate rent, even if it's to remain the same. Get a better PM.

 

[tess85]

I am confused: didn't you recently increase the rent? I have had IPs for 30+ years and my PMs hardly ever let me know when the fixed term tenancy is about to end. Should they?

In August 2013 I raised the rent from $275pw to $285pw. (last yr)

Yeah I hopped onto domain before I emailed the PM and figured out already that a $5 pw rent increase was doable but $10 pw was stretching it.

I'm happy to do this with all of my properties (I'm a reasonably pro-active LL I think - I'm always checking out current rents and values of IPs in the areas that I own IPs) - but I don't have a system in my calendar yet to check that a fixed lease is coming up. All my other PMs usually notify me whether to renew the lease or not. I only noticed by pure chance that the 1 year lease was up without the PM notifying me for this IP.

Hmm, I do pay 5.5% management fees to this PM though. The ones I pay 6.6% and 7.7% to are the ones who give really proactive service. I wonder if it's reasonable to expect sub-par service because I pay a cheap management fee.

 

[Scott No Mates]

I wonder if it's reasonable to expect sub-par service because I pay a cheap management fee.

Is it a case of paying peanuts and getting monkeys?

As to your calendar problem - if you use microsoft, put the expiry dates & notifications into calendar, if you use google, put the expiry dates & notifications into calendar, if you use apple, put the expiry dates & notifications into calendar. What's the issue? They all have a reminder function - set it 3-4 months out, then at monthly/weekly based on expiry dates.

 

[Giuseppe]

I've learnt that property managers need to be managed.

 

[MichaelGilbert]

My opinion of best practice is:

The owner should be called 60 days out from when the fixed term lease is expiring regarding a New Lease and a possible rent increase.

ALSO in addition they should be conducting Routine Inspections (depending on state but usually atleast every 6 months) and this should also include a Rent Review and a note on the report as to the status of the lease (fixed or periodic).

I think if your agent is not doing that you might as well be doing it yourself.

 

[S.T]

My opinion of best practice is:

The owner should be called 60 days out from when the fixed term lease is expiring regarding a New Lease and a possible rent increase.

ALSO in addition they should be conducting Routine Inspections (depending on state but usually atleast every 6 months) and this should also include a Rent Review and a note on the report as to the status of the lease (fixed or periodic).

I think if your agent is not doing that you might as well be doing it yourself.

Wouldn't you contact the landlord at say 70 days out? To give you the 60 day period + postage times to send out a rent increase notice?

 

[Worldtraveler1]

Definitely should have let you know before end of lease & advised whether an increase was possible.
Agree with simtr above that 70 days out is the best practise.

 

[MichaelGilbert]

Wouldn't you contact the landlord at say 70 days out? To give you the 60 day period + postage times to send out a rent increase notice?

Hey Simtr,

Yes good point, I was just trying to keep it simple. To be honest I use to set my alert for 72 days out. Which allowed time to organise the rent increase and send it out plus the days for postage.

Thanks for pulling me up!