Tenants want AC - what would u do?

[GZM]

Just a quick one...our tenants have just asked for an air conditioner to be installed. Never done this before, and have no idea what it costs, or whether I should put one in just because they've asked.

What do people usually do in this situation?

I've just put up rents by $20/week, and they've just signed the new lease (12 months). They're really good tenants.

 

[ozi]

Everything is negotiable! If they have asked for air con, you can either give it to them or not. Don't feel as though you have to. Maybe you could re-negotiate the rent, saying increase it another $10-$15 if you install it.

Cheers,
Ozi

 

[wylie]

We had tenants ask if they could put air in themselves through a window, and promise to leave the house how it was. They were fantastic tenants, and we trusted them, but decided instead to install a split system for them.

We didn't put the rent up because they were only renting until they sold interstate so we knew they would be going before too long. These tenants also agreed to let us have a builder put up a huge back deck while they lived there. I think we dropped the rent $20 per week while this happened. Again, we didn't put up the rent for the deck because they sold their house, and bought again quite soon after.

Just before last summer we gave some tenants the option of having air-con in exchange for $15 per week extra. They also were waiting on buying a house and didn't want the air. They leave in a week and we have just had it installed so the next tenants will be paying the higher rent, and we start to recoup our costs.

If your tenants have just signed at a higher rent, I would be putting it to them to pay an extra $10 to $15 for air. If they don't want to do so, I would not spend the money.

Our split cost us about $1200 and install $700 in Coorparoo. We could have bought a cheaper unit but went for quality and paid a little more.

Watch for the fact you may have upgrade your power box, depending on the age of the house.

We are also going to install a dishwasher in this same house because it makes a house much more appealing than one without.

Wylie

 

[Dis]

I don't believe you can increase the rent until the lease is expired (someone correct me if I'm wrong). The only way you could possibly increase rent is to mutually agree to break the lease and resign them to a lease with higher rent.

If they are good tenants paying market rates I wouldnt bother increasing rent. If they are good tenants who have been allowed to pay below market rates, you would need to decide the case on its own merrits.

We put in a split system inverter for ~3k a year ago. It was a large unit because we have an open plan living area. When choosing the unit, quality brands are as important as price. Ours was Mitsibishi. Cant remember what other brands we looked at.

 

[Dazz]

...our tenants have just asked for an air conditioner to be installed. What do people usually do in this situation?

I normally ask "How badly do you really want it ?"

They normally pause and have a bit of a think...cos the answer will dictate their cash outlay.

Notwithstanding the "bigger picture" of course.

I'd have to disagree though that they are 'good' tenants. Good tenants wouldn't have asked you that wormy question. Why else would you have posted this question ?? They've put you on the spot - literally asking you to fork over a couple of K for their continued comfort - nice if you can get it.

A good tenant in my books would have written you or the PM a letter advising that ;

"They wished to install an A/C, were prepared to pay for the capital cost and installation of said item, and any ancillary upgrade to wiring necessary to accomodate their wish, to the Landlord's satisfaction on both colour and finish, and would be pleased to leave said item in the Premises after they leave for your depreciation schedule - receipt will be forwarded to you after installed. They also agree to be fully responsible for all maintenance and extra running costs of the A/C whilst they are leasing the Premises."

Now that's a good tenant.

 

[phil]

G'day,

I'm just in the process of installing 2 split systems also. I think it is worthwhile. AC is pretty standard now, and if it helps to 1. Attract a tenant quicker, 2. increase your rental return through a higher rent, and 3. increase the value of your property / assist with depreciation etc, it can only be a benefit to you.

Just my thoughts,
Phil

 

[burty85]

We put in a split system inverter for ~3k a year ago. It was a large unit because we have an open plan living area. When choosing the unit, quality brands are as important as price. Ours was Mitsibishi. Cant remember what other brands we looked at.

I have to agree that quality brands are as important as the price, i had a lot of trouble with my split system in the PPOR i bought, had a no name brand (Electra) in the living room that stopped working... It took 2 days of me calling (over 30 calls) to find some one that would fix that brand, let alone have ever heard of it.

Also being under 5yrs old it still had warranty on it, but the company that built my house had moved interstate and now have no record of ever building my house so i could find where it had came from, cos no one in darwin sells them!!!

 

[wylie]

Number one, find out whether they want to pay an extra $15 per week. If no, don't do anything.

If yes, find out whether you can mutually tear up the lease (your state will have someone who looks after this, in Qld it is the Residential Tenancies Association - not sure about Vic) and sign a new one at the new rate, and include in the lease that air-con will be installed within xxx weeks. You can possibly put in that rent is $xxx per week until air-con is installed when it will rise to $xxx.

Your tenancy association should be able to tell you whether you can do this, but in my opinion, you are releasing them from their lease and signing a new one - but check it out.

If it was me, this is the path I would take, but because we generally sign six month leases, I would wait until closer to the new lease to install the unit and then sign them (or someone else) up at the higher rate.

I don't do things like this because the tenant wants air-con, but if I can get $15 per week extra, the air-con is paid for within two years and I have a much more attractive house to let for the next tenants.

Wylie

 

[Dis]

For those who have AC in their IP (I dont but I would like to do it in about 1 year):

- How much extra can you charge per week ?
- Do tenants care much if you just have one central unit in the living area (eg no AC in bedrooms)?
- If you put in a multi-split unit , does it translate to more rent?

 

[wylie]

We have queenslanders with transomes (not sure if that is right word) above each door, so even if the bedroom doors are closed, some air does get through to the bedrooms.

We got units big enough to do the living areas but our tenants tell us that the bedrooms do also get the benefit.

Our man in the electrical business tells us not to touch the multi-head split systems, so we haven't used them.

We have asked $15 per week extra, but really have put in the systems generally when we are ready for new tenants, so haven't had anyone actually pay the extra, but have certainly been able to ask for more rent once they are in.

Wylie

 

[ozi]

For those who have AC in their IP (I dont but I would like to do it in about 1 year):

- How much extra can you charge per week ?
- Do tenants care much if you just have one central unit in the living area (eg no AC in bedrooms)?
- If you put in a multi-split unit , does it translate to more rent?

In the current market (for inner Melbourne anyway), I don't think it makes too much difference. I have just rented a house and was considering installing air con. The PMs advised me not to as it wouldn't increase rent by much if at all. Basically it comes down to lack of supply in the area, so tenants aren't being picky. You might be able to increase rent if it is an existing tenant, thats if they want it.

So it comes down to the area. Speak to you PM and find out what tenants are looking for. The PM will know if its worth installing. But not doubt a property with air con will be more desirable than one without, especially during summer.

Ozi

 

[lizzie]

I'd have to disagree though that they are 'good' tenants. Good tenants wouldn't have asked you that wormy question.

as always - daz in on the money.

if they were good tenants, who wanted it badly, they would've gone down to bunnings and bought themselves an evaporator unit.

 

[coolie21]

I've installed aircon in 2IPs this year, each top quality brands. One cost 3300 all up for 2 quality split systems. The other was 4300 because of higher kw rating and upgrade required to powerboard. The latter has the advantage though of fewer maintenance calls for tenants tripping the electrics.
Our rental agency suggested an extra $20/week rent for aircon, which we got, but in each case installation was before rental.
To me its a no brainer (in Queensland):
- increased rents cover cost in couple of years
- depreciation helps also
- properties with aircon expected/desirable
- don't forget advantage of heating in cold winter months (alright, weeks ) - having a good split system means your tenant is less likely to be fannying around with dodgy heaters

my 2c

 

[Alanna]

Dont forget to consider in the cost if your electrical board is going to need upgrading in order to run the system, then you will need to factor this in. It is also required in some states to install an RCD if you do work on the board, I think.
This will add to your costs.

 

[coolie21]

Dont forget to consider in the cost if your electrical board is going to need upgrading in order to run the system, then you will need to factor this in. It is also required in some states to install an RCD if you do work on the board, I think.
This will add to your costs.

Yes it will, but as I pointed out it may be worth it in the long run anyway with fewer call outs for tripping faults. Many older houses were wired in the days when we didn't have electric everything and just can't take it. I personally wouldn't skimp on electricity issues.

 

[skater]

Well, I would have to agree with both Daz & Lizzie on this. I NEVER upgrade a property unless it is my own desire to do so, or there is a likelihood of me getting a better yeild. They have just renewed their lease. They know what is included at the property for the amount of $ they are paying for rent. As far as I am concerned extra services require extra payments. Bearing this in mind I would give them a choice of the following:

A) They go buy a portable for their own use, they can then take it with them when they relocate.

B) They have a split system professionally installed, at their expense. This then remains at the property.

C) I have the airconditioner installed & they pay me an increased rental substantial enough for me to recover my costs within a timeframe I am happy with.

 

[Jayro]

Wylie can I ask why you were told to stay clear of multi heads. In the right application these units are brilliant. Take a 3 bed unit in a high rise. Instead of 3 indoor units and 3 outdoor units on the balcony there is now (with a multi) 3 indoor units and only one condenser taking up balcony space. One compressor that can fail instead of 3 etc etc. Everything has its place. Certainly multihead units in the cheaper brands are absolute rubbish and cause alot of grief to clients BUT multi's in the top range makes are very very good in the right application.

Jayro

PS Not too many boards should need upgrading for the install of split systems. Unless the homes are pritty old with old wiring. Small units will only need a 10amp circuit and the bigger splits will generally go up to a 20amp circuit. Most places can handle this as a rule. As always have an electrician or a/c company check it out 1st.

 

[wylie]

Hi Jayro. The chap we buy our electrical through obviously doesn't like the multi-head systems. I have never asked why, and to be honest, our houses get by with a single split in the living area which pushes enough air into the bedrooms because they open off the living, so we have never really asked him why.

I got the impression he has heard bad reports about them. He recommended the installer who did our last job so maybe he has had some feedback from the installer.

I think they sound like a really good idea, so one day I will remember to ask him.

Wylie

 

[Jayro]

Ok thanks for that Wylie. Was just curious for my own sake that was all. Just interesting to get different feed back on them from different people. Even if you could throw me a PM if you do think to ask him next time. Always good to know the pro's and cons of things.

I agree with your method of just putting one in the living area and pushing the air through. Works fine most of the time I think.

Thanks
Jayro

 

[Ausprop]

we are talking about resi here... fairness of who pays and ROI does not apply. just shut up and install it because you will never hear the end of it if you don't.

(actually should clarify - not telling you to shut up... it's just a catch cry of a mate that I think is quite amusing but can sound wrong when written down!)