VIC 6 Months lease ? Yay or Nah?

Discussion in 'Property Management' started by Drekko, 10th May, 2021.

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  1. Drekko

    Drekko Well-Known Member

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    Hey guys
    My property has been vacant for 40 days now
    A person has shown interest in it recently but they are just after a 6 month lease as they are building their own house and require to be somewhere untill thats done

    Never done just a 6 month lease before but I havent been a landlord long
    What do you think
    I feel its better then being vacant at the moment
    My agent has decreased the asking rent price already a couple of weeks ago due to low interest
     
    Drekko, 10th May, 2021
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  2. wylie

    wylie Moderator Staff Member

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    I'd take the six months over having it empty.

    How much has the price decreased? These people may have taken it at a higher rent due to them only wanting six months, but perhaps it is too late now to ask a bit more. You could say "we'd prefer longer lease, and would want a bit more for six months due to having to pay to find another tenant in six months".

    It's similar I guess to people prepared to pay more for being allowed to have a dog.

    I've no idea if that is legal or not. Not advice.
     
    wylie, 10th May, 2021
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  3. Drekko

    Drekko Well-Known Member

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    Thanks

    Well I could offer. if you could do longer then 6 months we could drop the rent a bit?

    Unsure

    We dropped it by $10 per week just a bit
     
    Drekko, 10th May, 2021
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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    A $10 drop is pretty insignificant especially on a 6 month lease.

    What stage are they at with construction - contract will often state 6 months from commencement but it would be rare for the builder to start straight away as they would need a week or two to start arranging trades.

    At the other end, they often run over time - variations, wet weather etc so would most likely go into hold over for a month or two.

    Consider also that the builder will bust a gut to get the job completed before Christmas as no one wants to move in January, trades are on holidays etc. See if they are amenable to 7 months to avoid the Christmas vacancy period and pick up on the January school change families.
     
    Scott No Mates, 10th May, 2021
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  5. Drekko

    Drekko Well-Known Member

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    We dropped it like a week before this new candidate showed interest as we werent getting that much

    I have no idea what his build stage is at. He could tell us anything
     
    Drekko, 10th May, 2021
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  6. wylie

    wylie Moderator Staff Member

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    I agree with @Scott No Mates that $10 drop is not worth worrying over. But I also agree six months will take you to mid November. A building delay, or weather delay may see you looking for tenants mid December or even over the Christmas holidays. Not ideal.

    But rent coming in is better than another few weeks empty. You may or may not have a few weeks empty over Christmas, but if you say no to this tenant, you will have empty weeks now.

    Having said that, I found tenants on Boxing Day one year.
     
    wylie, 10th May, 2021
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  7. Drekko

    Drekko Well-Known Member

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    Luck of the draw in this case

    but he could just ask to increase the lease by another 6 months if the builder is slow
     
    Drekko, 10th May, 2021
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  8. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Given you've had quite a long vacancy of 40 days, I would take the 6 month tenancy, more ideally if they can stretch it to 8 months and avoid the holiday period. Hopefully will be a better time to re-rent down the track. Definitely having rent coming in is better than no rent.
     
    Mel Morgan, 10th May, 2021
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  9. Pumpkin

    Pumpkin Well-Known Member

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    Often with new Tenants, especially those with less-than-perfect credentials, we'd prefer 6-month just to test the water.
    Also give us room to increase after 6-months.

    In your case, seeing that it's mid-May now, how about offer a Lease which finish in early to mid January-2022?
     
    Pumpkin, 10th May, 2021
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  10. Ronen

    Ronen Well-Known Member

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    OP, would you mind sharing where the property is and what type it is (free standing, apartment etc)?
     
    Ronen, 10th May, 2021
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