New IP - don't want to throw tenants out

Looking for a new IP and finding a lot with long term tenants paying well below market rates.

I kinda need the market rent in order for the deal to make sense but I don't think I've got it in me to buy a place and put the rent up (a lot). Not with the current vacancy rates. Like...where do these people go?

I understand "it's just business"...and normally it would be. But what I'm seeing on the ground is that a lot (not all) of these long term tenants are vulnerable...and I don't won't to be the trigger that puts them out on the street.

In a normal market none of this would be an issue as the tenants would just find another place but what is going on now is not normal. There is often no other place.

It's affecting my investment decisions...I wonder if it's affecting anyone else?

 

Buy a block of land and build a house.
Plenty new H&L packages available.

 

I'm one of those - apparently - rare landlords that also allows pets

 

Why not get a property manager to let the tenant know about the increase
Or you can say you act for the owner who wishes to remain anonymous
The under-rented properties you are looking at are the best properties to buy .

 

... or you can decide to put up halfway now - and halfway in 6 months time

 

Most of the tenants you speak of know that they are paying under market rent. In most cases they won't be surprised to get an increase. Sadly, unless people own their own home, some will be priced out of the area they live in and have to move further afield.

 

Where?

 

Tenants leave when it suits them, I learnt this lesson twice last year.
Either put the rent up or ask them to leave.

Having said that I looked at a property with 2 aged pensioners in it. I saw my parents and wouldn't have been able to ask them to leave and they can't afford a higher rent. I just moved on.

 

https://www.reddit.com/r/australia/comments/us4j0s/tips_for_living_out_of_my_car/

In such a wealthy country I never thought I’d see posts like this popping up.

 

Buy the property under vacant possession. That way, it’s not your problem. Out of sight, out of mind.

 

• Buy owner-occupied property where owners are selling because they are upgrading/ downsizing
• Owner moving to their retirement home
• Vacant possession
• Existing tenants paying market rent (or close to)

I see options galore! It's not that hard!

 

Living in a car is common, and lots of YouTubers do it and seem to enjoy it. It leaves people with more money they don't spend on rent (and can use for a house deposit), or get them to think about getting a better job.

 

If the property is for sale, either an OO will buy it and the tenants will be kicked out, or an investor will buy it and need to up it market rent. Either outcome means that the tenants time is up in that property.

 

Thousands of acres of new subdivisions all over outer Sydney have been released over the last few years. Out west and south west plenty more on the way.
The list is endless if you look at SEQ and north and south of perth.
And since price wasn't mentioned, buy an old dilapidated house in the city or close knock it down and rebuild to house many families.

As for many replies of "vacant possesion" it just means somoone else is kicking the tenant out.
So from a moral POV it doesn't seem to make much improvement.

 

Buy with vacant possession..then find new tenants?

 

Tenants will have no problem leaving you high and dry if it suits them.

Are you investing or running a charity service?

There is nothing immoral about charging market rent.

Not being obtuse, but it is a question worth asking yourself.

 

@hammer if you're happy to accept way under market rent when you could receive market rent, that's your prerogative.

But don't ever think it's your responsibility to make up the shortfall for those who won't.

It's only through our collective decisions over a long period of time...do we 'suddenly' find ourselves in nirvana or.....struggle.

Harsh....and hard for many to accept. But unfortunately for the vast majority of people, that's what's happened.

 

In light with what's happening at the moment, I think everyone needs to consider fair market rent. Recently, I completed a major reno on one of my IPs which my tenant lived in the house for the last 6 years but the rent was way under market rent and did not keep up with the market rent.

Now original rent was $440 per week but it is now $650 per week. To be fair the entire house was renovated and it looks alot better now than before. The decision was made easier by the fact the tenant did not really look after the home.

 

I had similar and investigated one of them. The tenants were older and had been there years and I wasn’t going to boot them out.

I waited a few weeks and a place with vacant possession came up and I bought that. It’s worked out perfectly really: 2 weeks void in 4 years and never a missed rental payment. I couldn’t ask for better.