Settlement Services International Yes/ No

[2qt2bstr8]

Hi
Ill set the stage:
I have completed construction of my Granny Flat. Fortunately I am on a corner block which divides the property in two giving myself and prospective tenants separate egress and ingress into the property. The flat is unique in the way that I have finished it off to a quality that I myself would live in.
As agents have advised me they have not come across an investment property like mine in the area. (which yes was very ego stroking) anyway..

My Question
A real estate agent has advised that he has a contract with Settlement Services International (SSI is a leading not-for-profit organisation providing a range of services in the areas of humanitarian settlement, accommodation, asylum seeker assistance and foster care in NSW) and that my flat not only meets their requirements but exceeds it. Which means I would lease my property directly to SSI and they would put their tenants in there. They have offered:

* $30 above market value - Due to the quality and location
* 3 or 6 month lease - So if I was not happy I could get out relatively quick.
* 6 Weeks Bond - Due to the quality of the flat
* Guaranteed rent regardless of occupancy


So is this a scenario of:
Don't look a gift horse in the mouth
or
Its to good to be true

Also knowing that you would be helping legitimate immigrants is good as well. Of course for totally selfish reasons but still very small silver lining.

 

[Terry_w]

The usual applies but in addition you have to consider with leasing to a company you won't have control over who the end tenants will be. The company would be choosing. Does the residential tenancy act apply? Some of the migrants are fleeing wars, what are their backgrounds (unknown).


Different cultures and therefore different lifestyles - noise, cooking, hanging washing etc.

 

[DaveM]

One of my IP's in a strata complex has one of those style agency leases in the same complex... revolving door of tenants, noise, disruption, always having the strata manager issuing strata breach notices, police called a lot etc.

 

[neK]

out of curiosity, what suburb is your granny flat in?

 

[SeafordSunshine]

Dear Too cute! (love your name by the way)

Sounds a very interesting prospect, and your objectives are laudable, people who come from circumstances very different to living in Australia use the services of companies like SSA.
I remember laughing with a family who laughed at the idea of taking the lightbulb out of each room as you left...


They had come from hill tribes in a war torn place, and 25 years after settling in OZ it was something to laugh about.

I would think that it may be very rewarding, but also very challenging to live alongside?

I say 'Go with your gut instinct Cutey'

I hope this helps

 

[Peter_Tersteeg]

Renting to a party that will put a revolving door of third party tenants sounds pretty scary to me. As others have indicated, you've got no control and the conditions they're asking for aren't very generous.

Consider that you're ultimately renting your house to migrants/refugees who are represented by a group that was created for their welfare. The overall administration of that group may be professional, but they'll have plenty of individuals who will do anything to take care of their wards and they may not give a damn for a wealthy investor who owns a house they couldn't afford.

I'd be looking for more of a commercial lease given the circumstances. Something like:
* 3 years at current market rate with 5% increases every year.
* All outgoings covered.
* Property restored to current condition when its handed back (get a very detailed condition report with lots of photos).
* Get legal advice (or suck up to Dazz) regarding the contract.

Realistically though, I'd rent it to regular tenants.

 

[macca446]

Hi,
I have one of my properties leased like this not overseas people but the very low income this is through a different company but lease has been going for 4 years now and yes you have no say but I have had no problems and I receive $50pw above market rent do your own DD and have insurances in place.

 

[2qt2bstr8]

Thanks everyone for the feedback! I'm still tossing and turning but looks like most popular replies are leaning to not doing it. Hmmm my gut does say no but then my head says "no guys no glory" I'll have to give it some more thought :/
Ty

 

[Peter_Tersteeg]

"No guts no glory". Nice quote, here's another one. With reward comes risk.

$50 extra per week seems to be a fairly small amount for what I'd consider substantial risk. Your risk is an asset worth hundreds of thousands.

 

[impala67]

"No guts no glory". Nice quote, here's another one. With reward comes risk..

Here's another famous quote - Just do it!

...or in this case...Don't do it.

 

[Peter_Tersteeg]

Not saying definitely don't do it, go back to my previous post. Just saying that if you do it, do it on your terms.

 

[baby blue eyes]

Do you have the correct market value for you rent? My gf's rent at house prices with a good agent. They also have there own parking spots and separate yards. I regularly see gf's under rented by agents. One quote I had a couple of years ago for both house and gf was 100 per week under what I achieved by changing agencies. I never went with the under quoter, tenants are reliable and place managed well.

I would hate to see the damage of a revolving door of tenants on a new house/ gf

 

[Mitch1]

I also applaud your sentiments in helping others out, but personally, unless you had something like PT bears suggestion like a long term lease at x rate with x increase and most especially, "property must be returned in entry condition' I would not be as willing to sign up for it,

6 weeks bond is just that. It's good but if you are ever in a situation where 6 weeks bond needs to be used, would you get the level of works done in time to avoid loss of rent with a new tenant.

LL insurance does not cover what you think it will cover and neither will home and contents. Will an insurance co. Allow cover in the case of tenants not being vetted/or being chose by a 3rd party, you have to make sure it does and that nothing in the small print will void the insurance based on that.

Will a lease cover every eventuality for every culture.? They just about cover what we know about the Aussie culture.
A lease here might say no pets, cultural differences make chickens livestock not pets. No drying clothes on verandas. Ok but cars are great for drying clothes on... Extreme I know but it has happened.

The upside of this is there are some cultures who treat properties with far greater respect than some of our Aussie tenants.

You do get 6 weeks bond and you get $30 above market rate. Work out the figures and the possible risk involved in having no control on who is in your property. If you have a back up of being able to take action against the 3rd party here it alleviates a lot of this gives you some extra back up and makes the decision easier to weigh up.

At the end of the day, renting is a risk. It is also a reward. Treat this as business decision so you ultimately need to go with your head not your heart! But if you decide against it and feel guilty for doing so, you can always make a charitable donation to a similar institute on a regular basis....and it's tax deductible