Hi, Is there a website or another resource where I can research current rental prices in specific areas? And regarding Property Managers, does everyone just shop around for the best deal? I have had an IP for a few years now, and it is managed by a Real Estate agent and every time the lease comes up for renewal they keep telling me that available rentals in the area are high and they don't recommend increasing the rent. We have had one rent increase in about 5 years. I have finally decided to look into this further to make sure I have the right person managing my property. Any advice would be very much appreciated! Cheers, Jo
Have you checked realestate.com.au first? Just search for rentals available in the same area as yours, same house type as yours and see what the asking rent is, that will give you a starting point at least.
Hi Jog21, I hear what your saying mate. I cant tell you the amount of times I had PMs telling me not to increase the rent or only by $5 after a 12 month lease ended because of X,Y and Z reason, when clearly the research showed it could easily be increased by about $15-20/week and would still be reasonable. Of course I did my own research to confirm a price increase is reasonable and instructed my PM to do as I request. In all that time I only had 1 tenant decide to leave. The property was re-tenanted the day the tenants moved out for the new rental amount. I have come to the conclusion that unfortunately there are quite a few PM agencies who when it comes time to advocate for their client (us) and manage giving us good advice, they have conflicting agendas. Good on you for wanting to do some research to back up your instruction to the PM. Besides only a handful of markets where rents wouldn't have moved in a number of years, unless your property is one of them, its complete incompetence by your PM to not increase rents for 5 years and once your research is done, if you find your IP is grossly under rented, I would give your PM agency the sack faster than I can say 'boo'!. Use REA website and Domain.
This is a good idea, but be aware that asking price and renting price are two different things. I have a rental in Cloverdale and comparables are listed at slightly higher than mine. However, some have been on the market for 12 weeks. They are listed for prices above what the market is prepared to pay at this time.
Brilliant, thank you so much Leo2413! I am a total amateur at this and am so very glad I have found this forum. I have been going blind up until now and I am on a mission this year to get on track with my investment portfolio!
Good on you mate. There are a lot of good people on here. Don't forget to self educate yourself via books as well. Its essential imo. Well done!
Why wouldn't PM agencies want you to increase the rent ? Isn't it in their interest to have the rent as high as possible. i.e the higher the rent, the more they receive in management fees.
Hi Teg, Increasing rent means the PM has to do some research, get in contact with the tenants to let them know, and then sometimes listening to them ranting about how its not fair etc etc. Then if tenants decide to leave because they don't want to pay increased rent, the PM agency has to advertise, have open homes, actually spend some effort to get a tenant sometimes. In my opinion, some PM agencies are just not bothered to do all this and rather than 'upset' the tenant, they just recommend a slight increase. This both satisfies both tenant and a lot of property investors because the majority of 'investors' are not like the clued up ppl on PC, but rather the 90%+ who just accept most things the PM agency says and goes with the flow. Don't get me wrong I've had very good PM agencies too.
Yes PM's can be wrong or lazy. We are settling a property that the selling agency advised that the current tenant (whose rent had not increased in the last five years) was the market rate. They balked we stated that the we would accept the tenant but only on the new rent being an increase to the tenant of $70pw. Agency advised that no properties were achieving our proposed figure and even issued a PriceFinder report to back their statement. Unfortunately for them, we has leased out a month ago the property directly behind this one for the same price that we had requested and that property had a bedroom less and no garage. Have another in the portfolio that is a direct comparable at the same rate. In answer to your question, try onthehouse.com.au http://house.ksou.cn/
Insist on rent reviews twice annually, though this will depend on the market and demand. Easy enough to look up rentals on RE and Domain to gage likely demand and prices too.
Thanks everyone! My IP is in Golden Point, Ballarat Vic. Time for me to do some research! I have just today ordered a couple of books recommended to me yesterday by someone else on this forum.
A few things - you can check yourself on Realestate.com.au for similar places to see what they're renting for. Not just the price though, check how many of them are up as this will give you an idea of the supply / demand in the area. Also compare what condition they're in and gauge accordingly - you'd think it'd be PMs best interest to increase it because their commission is a percentage of that. However most PMs worked their way up from being the agency's receptionist rather being from an investor background. Those of us who are investors ourselves want to maximize return on our own investments and expect the same from client's properties. - definitely review as often as allowed (as dictated by Act in your state and what the lease specifies), even if the result is to maintain the same. By taking an active approach, can stay on top of market and be forewarned of trends. Can also potentially maximise return. If they're not doing this then they're essentially rent collectors, which you could do yourself. Find an investment savvy PM
Often I think human nature comes into it because the pm regularly has to deal with the tenant in person while the owner is often an anonymous email or phone contact. Increasing the rent works best if its a small amount but regular, then its just like a cpi increase and no different to other bills etc.
Hi Jog, declaration of pecuniary interest here... I'm one of "them" ... a Property Manager No increase in 5 years is a little concerning, best to check for yourself the market in the area... The REIV have a good research page which you can click through by postcode and property type - http://www.reiv.com.au/Property-Research/Rental-Data/Median-rents-by-suburb . Keep in mind though that this is purely a Median (or mid-point) rent and while close in some cases, not entirely accurate - check the online listings as well. What can happen with the rent increase suggestions (and I know I'm going to be howled down by some on this...) is that when we look at the increases and the quality of the tenant, the economic argument for the increase is outweighed by the calculation of the potential vacancy costs if the tenant were to vacate... even a 2 week changeover period (plus letting fee, advertising, remediation and refurbishment works such as repainting, carpeting etc) can eat into the perceived benefit of any increase of less than say 15% or 20% of rental. I'm not advocating for no increase until we get to that sort of threshold, but a more circumspect approach would to be have an increase which reflects the value of keeping the tenant as opposed to changing them over.
Jog21, I've just found your post while searching for PMs in Ballarat. I was wondering how you went with your research etc, and if you changed PM? If you did, are you happy with your new one etc
