Granny Flat Tenant wants AC !!!

Discussion in 'Property Management' started by SouthBoy, 23rd Nov, 2015.

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  1. skater

    skater Well-Known Member

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    I think the Agent is lazy. The tenant has just signed a 12 month lease. They are not going to throw away 6 weeks rent to break the lease & go elsewhere. What suburb is the GF in?

    Have you even looked yourself to see what is currently on the rental market in the area. This is for 2770

    Real Estate & Property For Rent with 2 bedrooms in NSW 2770 (Page 1) - realestate.com.au

    The cheapest available is a really crabby one in Willmot for $260pw. I think your Agent might be telling porkies.
     
  2. SouthBoy

    SouthBoy Well-Known Member

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  3. skater

    skater Well-Known Member

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    OK....so you haven't checked for yourself that what this Agent says is true. Here are the listings for 2 bedroom places available for rent in Penrith. Yes, there's ONE cheap one, (NRAS), but there is only SIX that are under $300pw. None of those mentioned anything about air-con.
    Real Estate & Property For Rent with 2 bedrooms in Penrith, NSW 2750 (Page 1) - realestate.com.au

    Like I said, the tenant is on a good thing already, and is not about to move out. It's time to get tough. Always go into any discussion knowing the facts. Don't take what the Agent says as the truth.
     
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  4. wylie

    wylie Moderator Staff Member

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    If you pay $2,500 supply and install to get the place air-conditioned, @ 4.5% over a year, that will cost you in interest a grand total of $2.16 per week. I think your agent makes sense. For me, it is a no-brainer. If you want to keep the tenant there would you be prepared to pay $2.16 a week, or risk having to find another tenant, competing with cheaper places on better streets, with air-con?

    Agent "might" be lying, but for $2.16 per week cost to me, I would not take the chance.
     
  5. neK

    neK Well-Known Member

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    @wylie you look at it as $2.16 per week from an interest point of view. Thing is, the debt of $2,500 is still there.

    For me, i look at how long it will take to repay.
    @ $2,500 over a 3 year period, that would equate to $16 per week.

    That said, i've had 3kw daikins installed for $1,600 (back to back), so thats only $10 per week... so i would gladly install one if the tenant was prepared to come to the party and pay the extra $10 per week.
     
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  6. skater

    skater Well-Known Member

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    Wylie, I agree, I'd have already HAD an air-con in the place....but....the tenant leased it AS IS. That is, without air-conditioning. Looking at what is available for rent in Penrith, there are only 6 places that are asking under $300pw, and NONE of them mentioned air-con. This Agent has said that $250 is market rent & not worth anymore with the air-con. I'd be pushing really hard to raise the rent, but I'd also be looking for a better PM.
     
  7. wylie

    wylie Moderator Staff Member

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    I take your points neK and skater, but for me, I just wouldn't want to risk losing a sitting tenant when it is easy to keep them by spending so little. I guess I see the $2.16 interest as what it would cost, but I know the $2,500 has to come from somewhere. Air-con at this time of year is important and if this tenant does leave, finding a tenant without offering it will be trickier than it needs to be.

    I know the tenant has a lease, but tenants break leases all the time. Easier I reckon to just add it now and hopefully keep them. Increase the rent when it is due next time.
     
  8. skater

    skater Well-Known Member

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    Wylie, I know what you are saying, but the market rent for a 2 bedroom place in Penrith is currently over $300, and this unit is sitting at $250. I reckon it would be extremely easy to re-let it, and for more than what it currently is renting for. If the tenant breaks the lease, then they would have to pay over $300 to get something with air-con, because none of the cheaper ones had it, so asking them to pay extra now, should be a no-brainer.
     
  9. Chilliblue

    Chilliblue Well-Known Member

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    I have issues with this line if you were never informed of this before. Start looking for a new PM.
     
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  10. SouthBoy

    SouthBoy Well-Known Member

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    Hmmm...I did check on realestate.com.au, properties for rent in that area. I find it much harder to get the historical data of all rented properties for a postcode say for the past 12 months. Its much easier if you want to know all SOLD properties for that postcode for past year. As soon as a property is rented out, its taken out of the web and you can never access that info at a later time.

    For 2750 I see 2-bed flats renting for under $300, and newer GFs around the same. My property is 3 km away from Penrith Railway station, and I know this street has many housing commission properties. I do not disagree that this PM is a bit lazy, but I am just waiting for the right time to bail out and find another PM. I don't want to go to a new PM, and find that they are saying the exact same thing as my current PM.
     
  11. ashish1137

    ashish1137 Well-Known Member

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    I have been tracking this thread and here are my takes:

    1. This is not a proper two bedder, it is a granny.
    2. If the agent says that it is not the most desirable street, there might be a reason behind it.
    3. And having an aircon in most of the desirable properties, I agree.
    4. Passing on the cost over a period of one year, I again agree, but not the entire, you can subtract the depriciation. After all, it is your property, right.
    5. Normally, people extend the lease because they are afraid of the hassles of moving.
    6. I'd suggest you talk to the tenants or ask your agent to talk. But a substancial increase only.

    I am sure they wont mind that.

    Regards
     
  12. skater

    skater Well-Known Member

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    You don't need historical data when looking for rents. Why would you need that? This is the current data of what people are expected to pay today.

    Yes, there are only 6 x 2 bedroom flats renting for under $300. Are you saying the quality of your's is inferior to them?
     
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  13. SouthBoy

    SouthBoy Well-Known Member

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    Historical rental data would have helped me, as that way I can validate what my PM saying is true about renting out another GF on that street for $210. My GF is not so bad, but not in the best neighbourhood. It's somewhere between Cranebrook and Penrith station.
     
  14. ashish1137

    ashish1137 Well-Known Member

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    Is there a dislike button here. :p
     
  15. skater

    skater Well-Known Member

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    1) A granny can be a lot more desirable than a unit, and command a higher price. It all depends on the quality, and the way it fits into the block. It could be a dodgy run down hovel, or a beautiful small house. I'm presuming it's not a dodgy run down hovel. A Granny can be a studio, a one bedder, or a two bedder.
    2) You should know your area, and not be relying on the Agent.
    3) Like I said previously, if it was mine it would have an air-con and the rent would be a lot higher, so lets not go there, this is irrelevant. You have a sitting tenant who wants an extra service to what they signed up for, so they should pay extra. The rent was calculated on a property without a air-con, not for a property WITH an air-con. You are a business, not a charity.
    4) Really? You go with whatever works, and market rates, but usually $10pw is not too unreasonable.
    5) Normally people extend leases because the property suits them
    6) If you employ a PM, then they do the work, not you. If the Agent isn't up to the job, you need a new one.
     
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  16. ashish1137

    ashish1137 Well-Known Member

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    Agree with all point (to certain extent) exept two.

    1. This might be a business but undertake interest of both parties.
    2. It seems that you are too bossy over your PM. :p

    So you have to understand why he said what he said. Seems, @SouthBoy understands to some extent. A person cannot always reapond as per your desire even though he is employed by you. :D
     
  17. SouthBoy

    SouthBoy Well-Known Member

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  18. wylie

    wylie Moderator Staff Member

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    Google "ksou" and enter Penrith (or whatever suburb you want to check) and then filter it as "recent" or however you wish to filter. That will show you rented prices (and sold prices).

    I also agree that if it turns out that you could be getting more rent, and it is unlikely your tenant will leave early (or even at the end of the lease) then it is entirely reasonable that you ask for a little extra for having put in the air. I would be asking $10 minimum if that is what your place would rent for with air-con.

    Check out ksou site to see what recent places that compare with yours have rented for and take it from there.

    We try to add dishwashers, air-con etc between tenants so we can ask better rent from day one, rather than try to make a sitting tenant see that they are getting value over and above what they have signed up for.
     
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  19. bob shovel

    bob shovel Well-Known Member

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    That's irrelevant, I think they both brought their opinions to the table in a nice manner.

    Get the quotes for the air con.
    Call a couple of other agents and get their opinions of rental demand and prices with and without air con. Plus ask what the demand for gf vs unit. I don't think there are many units where your describing,it may mean going to a unit in a more undesirable area
     
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  20. neK

    neK Well-Known Member

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    A properly designed and built granny flat is treated as a 2 bed house.

    A bs garage conversion granny flat is treated as a dodgy conversion.

    Which one do you have?
     

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