Expense vs. Rent ratio - anyone know what their portfolio average is? (not a thread about yield)

Chose a random one of mine is 255pw which x 52 = 13260 (had no vacancy)
Expenses:
Council 1100 pa
Water none, tenant pays even supply
PM none, staff discount
LL & building insurance 650 pa

So 1750 / 13260 =~13%

 

Commercial property 10% , property under PM was 35% when self managed 16%

 

Will it lead to a liability claim?

You'll be surprised how handy your tenants become when you leave it for a bit. Suddenly they can change their own tap washers and light bulbs.

As a tenant myself, I know the cost of moving house is $500 minimum. If the landlord won't fix something small, I either get use to it or fix it myself.

 

13 townhouses in Brisbane & Sydney - 20% for all costs, (excl interest) vs income.

 

Til they injure themselves and blame you.
Evidence will suggest;
1. Tenant requests maintaince and keeps a record of what / when they asked
2. LL declines
3. Either the maint issue itself or attempting to repair it themselves causes tenant injury
4. LL pays damages

 

Is the item in the rental contract? Remove the item. Can't injure themselves if it isn't there. A tenant mentioned a cornice was loose in a shed. I removed all the cornice. Never had to worry about it again.

I leave out airconditioner and other such items from the contract. It's there and they love it. If it breaks, it wasn't in the contract.

I'm actaully a very good LL. Some tenants have moved from one of my properties into another. They all pay above average rents. The question is, where is the line before you are being taken advantage off. Like McDonalds, you need to have a set of guidelines to guide you as you grow larger. Otherwise too many decisions, need to streamline it. Eg. give agent a minimum spend without calling you otherwise you get a lot of calls.

 

From your list I don't see any maintenance budgete?

 

Really? Because it kind of sounds like you're skipping out on the maintenance of the property you're required to do under your tenancy contracts.

I wouldn't have said that being asked to fix the things you're contractually obligated to do is "being taken advantage of".

Moral issues aside, your tenants would be entitled to claim rent reductions and compensation from you in those scenarios too.

 

Yep, without going into too much detail we had one of these. Item repaired by contractor poorly, I advised pm to again ask for item to be repaired, several months later tenant injured and makes a claim.
Tenant makes claim against pm and us, pm issues notice of claim against us, our insurance company does like wise against pm and contractor. All very messy, the fact that I had communicated by email several times to get the item repaired meant we/ our insurance company were not directly liable. The contractor who didn't repair the item unsatisfactorily was liable.
Tenants can and do sue, not repairing items when asked means your playing with fire IMO.

 

Guidelines are fine but I don't think that is reasonable at all, as a LL you have obligations which I don't think you are meeting if you don't approve routine maintenance.

 

Rule 1 and Rule 3.
Safety concern and rental return.
Perhaps I should have better worded it to, impacts capital value/rental yield.
If a lack of maintenance like cloged gutters isn't done, the flooding issues may impact the value of the property and cause me more headache in the future.

That is not what i'm referring to. The original poster was stating there was a lot of requests being made. Unless the house is falling to pieces I question wether they are all really emergencies or neccessary.

 

Interesting discussion. I will still be approving maintenance requests for items which are clearly broken though. The cost is so small and I see it as my duty to do so. Improvements on the other hand I will think long and hard about.

 

Yes but you seem to be saying that your test whether to fix things is "how does this benefit me?"

Well sometimes it doesn't. Your contractual obligation doesn't work like that.

The equivalent for a tenant would probably be to pay rent 1 to 2 weeks late every time. I mean, what's in it for them to pay on time, as long as they pay before a termination notice period is up right?

Anyway, this is a getting a little off topic.

 

That's because there aren't any.
I renovate them all before i lease them... except for one of them.
I've been meaning to renovate it but haven't got around to it.

I did put down $44 in miscellaneous expenses, based on a 5 year average.

• $150 Oven light (stupid tradie - apparently their changed their policy, i told the PM never to use them again).
• $10 Liquid nails to stick back tiles.
• $60 on woodchips to spruce up the place to attract a new tenant.

 

Thats pretty impressive, are they new properties or do you carry out minor maintenance yourself?

 

2 new (built from ground up - granny flats)
1 was a completely gut + extension - even replaced the roof (its was $2,000 more vs investigating why it was leaking and fixing it). House was fibro, but fully cladded over it (fibro left underneath, but completely covered up).

The one that is yet to be renovated has a 12 year kitchen (thats the newest part about it), and polished floor boards (have yet to repolish, been 12 years, fingers crossed it keeps going!).

 

Do you take out building and landlords insurance?

 

Yes. Forgot it on the first post.
Added it in on my subsequent post.
https://propertychat.com.au/communi...t-a-thread-about-yield.2522/page-2#post-38157

 

Yep, stand alone cheapies. I calculated my recent purchase ($275,000) @ 14.1% However, I will self manage this property and didn't factor in maintenance costs (as I don't know what they are yet)