New landlord here - question re turning down potential renters

Hello - new to being a landlord, as I inherited a small townhouse not so long ago (2br, Southside Brisbane, late 80s build, extensively renovated internally four years ago). For the past year or so, all has just hummed along with no real issues.

The current tenant wishes to leave I in January, so encumbent property managers are looking for new applicants. I've just been emailed from them re a new application.

Obviously I can't discriminate on all the usual things (gender, age, religion, etc, with which I have no problem. Is there any issue with me saying I do not want a four-person family as tenants? I just feel the townhouse is far too small - the main bedroom is small and the second bedroom is even smaller. Do I need to state why, or just say no and give no reason? Or am I being silly?

 

No, that can be a legitimate instruction to the agent - I don't want more than 3 people in the townhouse.

 

Perhaps they have to advise you of applicants, doesn't mean you have to say yes.
Property Manager is your Manager, your the CEO/boss, you let them know what you expect

If your not desperate say no until it feels right. But even then most of us get it wrong.

If you have any emotional attachment to it, unload it asap, will break your heart if it gets trashed.

 

Why not just have everything run past you and you decide.
If you say you don’t want 2 kids they will automatically get rid of potentially great tenants with a second child.
There is nothing wrong with you having those opinions except you are paying for it at $400 per week (or whatever rent is) for the privledge of having that opinion. Do you want the opinion or the rent because only one will be right.

 

It is up to you how fast or slow you are in your decision-making. If the applicant finds something else in the meantime then so be it

 

I would just pick the best applicant if any/many are suitable, no need to explain too much, PM also should advise regarding how many can live there.

 

You have every right to dictate the final decision, the Property Manager is there as a professional to guide you. I also personally think in this matter you're being very sensible.

Every application should be taken on its merit, but you might be biased towards a group of two or three. This application of four might be absolutely exceptional with great income and rental history with a tenant who has acknowledged the size of the property and is happy to continue regardless, in which case you might consider it. Anything short of that, your concerns probably outweigh the merits of the application.

 

Yes, currently there's three - two adults and a small child, and I have no problem with that configuration at all. I've lived in the townhouse with my partner, so I have a good feel for the space.

 

Thank you for your thoughts - good to know I'm not breaking any ethical/legal rules.

I wouldn't want to sell it while my mum's still alive (gifted by my dad), and I figured by then I would have a good understanding of whether it's more hassle than it's worth.

 

Having lived in the townhouse previously, have two small children in the second bedroom would be quite tight. Having two near-teens in a room that size seems crazy. I know I shouldn't judge what other people are comfortable with, size-wise, but something doesn't sit right with me.

I've also just re-read the PM's email and they want to pay $20 less per week as well. My parents have kep the place rent-controlled for years upon years, against the PM's wishes, because they believe it's better to keep the price low/constant if you have a good tenant.

It seems odd the PM is more than happy to drop it now? I know BNE has an apartment glut, but this place has a double garage, close to hospital, university, major shops, and good access to major freeway, and the price has already been kept lower for years.

 

Thank you for your thoughts.

 

Thank you for your thoughts as well!

 

Good to know, and I appreciate your thoughts as well. I knew I'd come across a landlord hiccup sooner or later. As I mentioned above, upon re-reading the email they also wish to drop the price by $20/week. Is that a common thing, when a new tenant applies?

 

Yes, a rent revise will happen each and every time a lease renewal or new lease comes up. The PM will advise whether it should go up or down, based on the market at the time.
Again, it's ultimately up to you.. you don't have to lower it.. but what if it then takes 2 weeks extra to rent? Do your own DD, but take what the PM suggests seriously.

 

We'd need more detail to say for sure, but it's not uncommon for Townhouses and Units in and around Brisbane to be seeing decent rent reductions at the moment. Jump on Realestate.com and check out what the vacancy rate is, or tell me the suburb and I'll upload a bit of recent data for you.

 

Robertson, 2br townhouse, double garage, brick, courtyard, built in mid-80s, air-con in living/dining, refurbished ~four years ago (new carpet, all new paint, new toilet, new downlights put in, new shower cubicle). Close to Griffith Uni, Sunnybank shops, QE2 hospital. Only one tenant since refurb. Currently $350/wk.

 

Thank you - food for thought with the maths, and exactly why I came here to learn more.

 

Aside from the rental question, I would also consider the tax implications of your plans. If you have inherited a deceased estate, you have a certain amount of time before it becomes subject to CGT. Depending on your personal financial situation and plans, it may be more beneficial to liquidate it CGT free and purchase a better property or pay down personal/non-deductible debt and re-gear into another IP.

Unless this townhouse is an investment grade property in its own right, there is no point in hanging onto it just because its an inheritance. Opportunities for CGT free gain are few and far between so without sounding crass on a personal level, you should maximise the opportunity.