Rental Market - Miami QLD

Hi Folks

Just looking for some feedback please on what you think will happen to the Gold Coast permanent rental market after the Games and what I should do in my situation.

Current vacancy rate is 0.9% and there is one house available similar* to the specs of mine listed at $570 in Miami.

I bought last March and have a lease expiring next month, we gave the tenants 60 days notice that the rent will increase from $500 to $520.

They pay on time and keep it tidy. However it is a share house with early 20's tenants, and there is only one remaining tenant from the original lease. She told the PM that they want to change 2/3 tenants again and only sign six months.

Do I give them notice to vacate, do a tidy up & relist before the Games...or give them the 6 months?

Answers to questions to my PM on what is current market value / potential rental and the demographic it appeals to have been frustratingly unanswered...

Many thanks!

@big max @Mel_C @Player

49 Chainey Avenue Miami Qld 4220 - House for Rent #422895658 - realestate.com.au

*similar -
both 3 bed / 1 bath houses
Mine has a LUG vs carport
Mine is closer to the beach
Mine is tiled & carpet in beds vs floorboards throughout
Mine has 4 fans (I installed in Oct) vs Lounge aircon & no fans
Mine has an older kitchen but newer bathroom

 

Although the owners of 49 Chainey have owned it for 4 months, it appears it was first listed for January, so I suspect they did some work since buying it. There's been 1,000+ views since the 11th when it was listed, which suggests very strong interest, I can't see it lasting much longer.

Sale prices and achievable rents have been on the up for houses in Miami and surrounding areas over the past few years so I think you've made a good investment. It's hard to tell without actually seeing your house, but the data would suggest that you're well under market. That said, I haven't seen your actual house so I can't be sure. I also don't really spend enough time in the area to confidently say what the rents are going to do with the coming and going of Commonwealth Games from this point (I tend to only extend to the Northern Gold Coast).

I don't think there is anything wrong with keeping these tenants, excluding the market value consideration. If the property is being well kept and you have a 'head' tenant keeping an eye on things, I wouldn't be worried about them at all. You should probably feel at least a bit bad asking them to leave so you can jack the rent up, but this property is first and foremost an investment. If it's any consolation, they don't come across as typical 'long term' tenants, so even if rents cool after the commonwealth games in a couple of years, you might not need to feel bad about letting go of good tenants at this time.

 

Agree with above. If the tenants are good the decision is mathematical. Will the letting fee and any possible vacancy be greater than keeping the rent under market if it's that far under you're unable to increase it in one go.

It's an investment so never listen to the line "Oh they're great tenants so I'm not going to put the rent up". There are great tenants everywhere and just because they're good doesn't mean you should be subsidising their living costs. Increase it by a break even amount of expected vacancy and letting and it'll be win win either way. At the very least I would be increasing it to $530 (in all honesty I'm a little ruthless so it'd be more in my case) which is $10 per tenant. They'll go look at other places on line and see that even at $530 it's still well under market on the comps that you're providing and realise it's still a good deal.

This demonstrates what can happen if rent isn't increased in line with market along the way...once you get too far behind it's hard to recover without having to make decisions like this.

 

Thanks @Tom Rivera @Andrew Hancock @wylie

The tenants were on a 6 month lease which expired about 6 wks after I settled. I got them to sign for another 8 months to expire after Xmas / NY. I was "nice" and didn't increase it then by $20.

I am not overly keen on swapping out two tenants again if they all want to leave in six months time anyway... but my choices are -

a) accept tenant swap & put the rent at $530 (can I do this if we sent them a letter in Dec @ $520)

b) budget for a few weeks loss of rent / re letting / tidy up and re list it circa $570

I'm settling on a PPOR mid year, so the extra $$ will help with serviceability.

 

@lost nomad you've had good input above. Legalities of how notice for rent increase was delivered needs to be clarified. I'm not sure that you can just change your mind if it's in writing and they accept. I would prefer all share tenants on lease however not sure if this was stipulated originally. If it's one tenant subletting you lose control and never be surprised if they move out without informing anyone. You have an insurance nightmare if anything goes wrong. Commonwealth games give or take either side isn't a factor IMO. The workers have finished and gone already. Vacancies are tight all around that strip for houses. Apartment Armageddon will arrive in circa three years. All the newer builds that are investments will feel rent reductions. I don't live far away from Miami. 550 to 580 would be the range you're in. Air con and not just fans is more appealing and likely attract less itinerant share tenants. You want a family if possible then set and forget. How far is it to walk to the beach? Are you local to the Gold Coast?

 

@wylie I'm not sure how the PM did it. When we renewed the lease before I had to sign an "Authorisation for renewal of tenancy" form. I haven't been sent one this time.

@Player All share tenants are on the lease & no sub letting allowed.

Re aircon I agree, I was going to add it to the living area on next tenancy change so it would appeal to a family

It's 500m to the Miami SLSC, and I'm based interstate.

 

It's a grey area. You can argue that if you haven't signed the lease, then the lease isn't executed, but the general understanding is that if you've made the offer- you can't rescind unless you have a VERY good reason.

If the agent sent them a lease at $520.00wk, you'll find it very difficult to change the amount, though given you're only looking at asking $530.00wk you can probably leverage the change of tenants? As with most things, these situations are best resolved with mutual agreement before anyone else needs to get involved.

On a side note, be careful with RTA advice. Always call three times to make sure you get the same answer....!