I am in the process of purchasing an IP in Logan city area which is currently rented. Current tenants have been living in there for 12 months and their lease is about to finish. By looking at the rental ledger, they have been paying the rental in time regularly. Also the rent is kind of higher than the average rent of this area. However, they do not look after the property at all and apparently they have one room mate and may be another cross renting. So they have couple of dogs and house is completely full of various things. Which makes sense because more than one family living in there. Current PM hasn't been looking after it well and I am going to get a new PM. My new PM suggested to give them couple of months notice to leave. The other option is to give them another 6 months and ask them to look after the property better and inspect regularly. Old PM seems to have a very good/friendly relationship with the tenants and they both have been praising each other. So when I change the agent, I am sure tenants are not going to be happy with the new agents. So it's kind of make sense that they need new tenants. But I am bit worrying about getting rid of them because it may take a few weeks to find new tenants right after I purchased the house. May I know what you would recommend for this situation ? Thanks.
Depending on your expectations. I prefer compromise where rent is reasonable and place is looked after. Sounds like with getting high return u have multiple families. If there has been low expectations of the tenants then starting again with new tenants and new agent may be best.
This. Is there any specific reason you want this specific property that outweighs this issue, I’m guessing there isn’t or you wouldn’t be asking. If not then why start with a headache, IPs are a dime a dozen in Logan.
I didn't see this is an issue to terminate the contract (it's unconditional now anyway). In worst case scenario we can issue notice to leave and find some new tenants. Looks like it's not difficult to find tenants in this area, however it can be vacant for a few weeks...
I personally would just get new tenants into the property. Yes, you may have the property vacant for a period of time but at least moving forward you won't have any hassles with the current tenants. Moreover, the Logan rental market is doing quite well at the moment so if you have a tidy property it shouldn't be too hard to find a decent tenant quickly.
I would start with letting the old PM go, and see how the tenants respond to the new PM. Try to tighten up things with the new PM to suss out if there is multiple tenants crossing scenario. if yes then get the new PM manage it without loosing any rental income. If you new PM is good enough, they will tell how to plan so that there is minimal vacancy period of Changing tenants will be ideal outcome.
You mention they are probably sub-letting? If that's the case, it's a massive red flag. You're going through with the sale, so I think your only option is to get new renters in and get a new PM.
Thanks all, we will start over with new tenants and new PM. As most of you have indicated, it's going to be troublesome with existing tenants who were allowed to do anything they want by the previous PM.
You'll probably have to spend a bit of money to tidy up the place after they leave. Plus the vacancy. Plus the lower rent you mention. And then the next tenants will probably be similar
A good PM will deal with bad but high paying tenants suitably, such as eventually evicting them when legal grounds permit and then getting a free makeover from insurance as bad tenants will do what bad tenants do best...
Without being on the ground and part of the situation, it's really hard to give you good advice here. Assuming the tenants aren't taking reasonable care of the house, and leaving them there will continue to allow degredation that will cost you more money to rectify in the future, it sounds like you do need to take action. The next step is whether you feel like they will be responsive to efforts to make them improve, or if you make a clean cut and move on. You can usually get a good feeling for that by seeing how they live and what their attitude is, some people just don't know how to care for a house, others have been allowed to get lazy. As far as the Property Manager, it does sound like you don't have any faith in the existing agents- you can engage a new agent from the day you settle. A new Property Manager should be able to build a rapport with the tenants, give you a different perspective on the situation and manage the tenancy in the direction that you agree it should be going- either improve, or remove tenancy.
