NSW Fixed or continuing term

Discussion in 'Property Management' started by Buynow, 20th Feb, 2019.

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  1. Buynow

    Buynow Well-Known Member

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    Am renting in Sydney and agent just contacted me saying landlord wanted to change from a continuing term to a one year fixed term lease. No mention of rent at this stage. Have been here for three years at same rent - first year was fixed term then it became continuing.

    From an owner perspective, what are some of the reasons why you would do this?
     
  2. Propertunity

    Propertunity Well-Known Member

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    Locking in a guaranteed income. Rents have softened in some areas - so $ value of rent can be fixed. Also if in an area of new rental stock about to come online then it prevents a tenant walking across the road for a newer property.
    Some LL insurance companies will only cover ‘loss of rent’ if the tenancy is on a fixed not a periodic lease.
     
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  3. jazzsidana

    jazzsidana Well-Known Member

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    It will lock tenants in for next 12months and give that rental surety esp. if vacancy rates are increasing..

    Cheers,
     
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  4. Morgs

    Morgs Well-Known Member Business Member

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    Certainty of tenancy would be a big one. Some areas of Sydney have had rents come off the boil due to an increase in supply so they may be worried you'll opt out of the existing rental with minimal notice period and have to lease it again at potentially a lower price.

    There are also some insurance implications if you don't have a fixed term lease.

    edit: Hah, pretty much word for work what @Propertunity said!
     
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    I would also add that it gives the owner a little more ammo when approaching the bank to refinance - a locked in tenant vs One who can walk with 3 weeks notice.
     
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Fixed on about 98% of properties over here
     
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  7. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    There are many reasons as above. Can even just relate to the owners own circumstances. They may have wanted to keep the option open to move back in if needed without having to wait for a fixed term to expire and now don't need that option.

    - Luke
     
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  8. Buynow

    Buynow Well-Known Member

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    Thanks for the comments. The house is in an established area but rents have come off a bit.

    From our perspective, a fixed term gets guaranteed tenancy for another year and might be able to negotiate a repaint. On the downside, we like the three months notice for the landlord on the continuing lease and not sure if we might want to move for schools later in the year which would be during the fixed term.
     
  9. ChrisDim

    ChrisDim Well-Known Member

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    3 years and no increase???? sounds like your property manager and the owner are deeply asleep at the wheel - which is good for you
     
  10. Buynow

    Buynow Well-Known Member

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    We are probably paying above current market rent and recent stats show rents continue to fall
     
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  11. ChrisDim

    ChrisDim Well-Known Member

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    All good @Buynow ftom my perspective. I am a landlord and property manager in Sydney so I know these things. If I were you, I'd tell them that I'd sign for a year - to give the landlord security - but ONLY if they leave the rent as is I'd also suggest you look to buy your own property (if you don't have one). There will be some good opportunities around for the next 2 years. After that, you should expect rents to start climbing quickly.
     
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  12. Daniel2012

    Daniel2012 New Member

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    We have a agreed to a few rent decreases of late - only a handful, on the basis of the tenants sticking around for a fixed term of at least 12 months.

    If you can do the same, you may as well ask.
     
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