Defining Market Rent

Discussion in 'Property Management' started by SeafordSunshine, 16th Jan, 2017.

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  1. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Looking to not 'fall behind' in adjusting market rent:)
    Have looked at similar properties in the same half of the suburb, inner city Sydney
    using:
    Realestate.com.au
    Home.com.au ?? is this it ?
    Old listings .com.au (smaller one rented across the road 6 months ago)..
    RP Data Suburn houses
    last rent increase was 2015
    any further suggestions?
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    Increase. Remember appropriate notice.
     
  3. SeafordSunshine

    SeafordSunshine Well-Known Member

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    The question I wanted to ask...
    Increase by how much?
     
  4. MyPropertyPro

    MyPropertyPro Buyer's Agents Sydney South & North Shore Business Member

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    I have written an article entitled "Accurate and Regular Rent Reviews" on our website that you might find interesting and will probably help. I'm not allowed to directly link to it (due PropertyChat site rules) but it's under 'For Investors > Investor Articles'. We also have number of research websites under 'Resources > Useful links' that may be of assistance.

    The best way to find out market rent is to have your property manager complete a Comparative Market Analysis (CMA) and adjust based on that.

    - Andrew
     
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  5. D.T.

    D.T. Specialist Property Manager Business Member

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    You said you reviewed all those sources, put together a CMA based on which ones are similar. Look at how much they rent for and also how long they take to rent.

    Its data driven and in the numbers.
     
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  6. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Thank you DT and MPP,
    I have completed a CMA myself, and based on this, I found that the market was in the vicinity of $100 pw more than current rent. Have instructed my Agent to increase rent by $50, as I think its too much to raise in one hit. Also a new lease for 9 months, to a traditional peak period.
     
  7. D.T.

    D.T. Specialist Property Manager Business Member

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    Which state is the property in? Some have limits on size of increases.

    Also, how on earth did the agent let it get that far behind?
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Have you had a chat with the property manager to get their thoughts? They should have some recent direct comparables.

    Agree with DT too - if they've let it slip behind by $100 p.w I'd question whether they're doing a good enough job!

    Cheers

    Jamie
     
  9. Perthguy

    Perthguy Well-Known Member

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    Happens all the time. My parents IP in Melbourne got to $150 pw below market value for rent at one point. They had instructed the PM in writing a number of times to increase the rent but the PM wouldn't. Many people assume the PM they have hired will be competent and professional. Many aren't. People don't realise they have to manage their PM.
     
  10. D.T.

    D.T. Specialist Property Manager Business Member

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    Most.
    Shouldn't need to.
    Its in the PM's best interest to keep the rent at market level for 2 reasons :
    1) Makes the property a better investment for the client, and therefore easier to hold onto and therefore PM has a client for longer, and
    2) They charge a percentage of rent as a fee, so need to bump the rent up to increase their own income. I'm all for win-win situations.

    Its also in the tenants best interest to keep the rent at market level too, because its easier to afford 5-10 $ jumps than a massive raise. Sure they might be long term, but never know when an owner might need to sell, or dies, or tenant's family grows and suddenly they're facing the shock of the market level.
     
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  11. Perthguy

    Perthguy Well-Known Member

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    I have found re.com.au to be misleading for market rent at times. For example, a property might be listed at $350 pw but if you follow it, it drops to $340 pw then $330 pw and might rent out for $320 pw.

    I find ksou good for previous rented prices but needs to be confirmed from a secondary source because sometimes the data is wrong.

    Australia Home Rent Price, Victoria, New South Wales, Canberra, Brisbane, Adelaide and Perth

    Search Estimated Values and Sales History For Any Property in Australia

    Example: 5 Cockshell Street Davoren Park South Australia 5113

    ksou puts the rent at $185 in Nov 2013
    re.com.au puts the rent at $185 per week in Nov 2013

    The numbers match, so I would assume likely correct.
     
  12. Perthguy

    Perthguy Well-Known Member

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    ^^^ particularly this. It makes me wonder why a PM would allow rent to get to $150 pw under market. Actually, its quite staggering if you think about it. It wasn't an oversight either because they were instructed in writing to increase it. Seems inconceivable to me.

    Equally though, why would 2 property investors continue to pay PMs to be spectacularly incompetent? I had that discussion a number of times to no avail. Still baffles me.
     
  13. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Dear All
    the house is in NSW
    The reason the rent was low at the time, it was rented just before Christmas, as soon as the renos were completed.:)
    It was certainly more important to 'get it rented' ( and get money in) than 'leave it vacant' over the Holiday break!:cool:
    I am normally the first to criticise Property Managers, but this time I certainly wont!
    Cheers and thanks,
     
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  14. SeafordSunshine

    SeafordSunshine Well-Known Member

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    When I ask for a rent increase, or any thing else I need to make sure of ...I also ask them to let me know 'when it has been done' this really helps me.
    I hope this helps you
     
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