Selling tenanted house

Discussion in 'The Buying & Selling Process' started by CheckMate, 12th Apr, 2020.

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  1. The Gambler

    The Gambler Well-Known Member

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    Fair points, BUT...
    If you moved now it would cost you NUTTIN'. Actually you'd gain 5,000-7,500 bucks if offered 10k. It's def a PITA in terms of planning, but most people are less busy these days.

    Also, 7,500 dollars is quite a lot of Ikea furniture or a couple of great holidays or eating out expenses for a year or even the start of a deposit on your own place!

    I'm interested in this mindset.
     
  2. Mumbai

    Mumbai Well-Known Member

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    I think you overpaid! I moved from Sydney to Melb with loads of items and it did not cost that much, not even close.
    10K is a really good incentive for a tenant.
     
  3. summer

    summer Active Member

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    Fair enough - just trying to be helpful and give my own tenant perspective. I am (very luckily) still able to work right now, so my downtime from not working is still really important to me. You know that saying time is money type thing.

    -
     
  4. summer

    summer Active Member

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    Probably but I guess removalists feel like they can charge move when they realise its an unexpected last minute move. Next time I will need to pm you to get tips on getting a better deal.
     
  5. Buynow

    Buynow Well-Known Member

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    I’m renting on a periodic lease and given rents are currently falling, I’ve asked the landlord for a rent reduction.

    Comparable places are much cheaper and I reckon we could save $200 a week at present (around 20%). About a $10,000 rent saving on a one year lease if the existing landlord does not reduce the rent. Say $2,000 for all costs to move including Removalists, connections etc and that’s an extra $8,000 in the pocket.

    Given we have kids as well, moving is not exactly easy. Lots of packing, changing utilities over, getting packing material etc. My better half is not keen on moving even at that level of saving.
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Rents arent all falling. Vacant property rents may be. Oversupply due to shortstays being back on market are pushing supply up vs demand and this will vary be suburb and even street. You could ask for reduction and the landlord may be able to access a new tenant happy to pay the present rent. Dont assume reduction will happen.

    My neigbour was a renter and tied to bluff the owners into lower rent. (He hadnt lost work) They decided to move back in and gave him required notice. So then he had to move out. He admitted he hadnt planned it well and had to find a new bond ,prepay more rent and pay for removal costs and a few basic repairs etc...All while lockdown was starting.
     
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  7. CheckMate

    CheckMate Well-Known Member

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    Just to give a little perspective why I think $5K was more than enough in this situation:

    1. Tenants are in their early 20s without kids and not so much possesions
    2. They would be required to move out anyway after the lease ends
    3. Upon agreeing to move out, it would be scheduled to July giving them more than enough time to prepare and find a replacement.
    4. A help in finding a new house was offered by the agent.
    5. Brisbane is flooded with rental properties and finding a similar house with a similar rent wouldn't be a problem.

    Again, they are a lovely couple and I have a deep respect to them and their decision.
    However, being in their shoes I personally would take the money...
     
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  8. Buynow

    Buynow Well-Known Member

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    Rents may not be falling where you are but in Sydney rents have been falling for the last three years and this has been accelerated by COVID-19

    SQM Research - Property - Weekly Rents - Sydney
     
  9. The Gambler

    The Gambler Well-Known Member

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    I'm a little confused... Are you the poster Summer? I was replying to their specific post that was about what Summer said about it being troublesome, no planning etc. If you're Summer, then that is a fair bit of info that would indeed change things. Although, who's to say you couldn't find an even cheaper place to rent?!? Could be a double win!
     
  10. Buynow

    Buynow Well-Known Member

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    No a different poster - you mentioned you were interested in the perspective so I gave you mine :)
     
  11. wylie

    wylie Moderator Staff Member

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    Your landlord will either agree to the reduction or not. If I was a landlord and I checked the internet and realised my tenant could get much cheaper rent elsewhere, and if I was feeling I'd have to reduce the rent to get a new tenant anyway, then I'd lower it to keep a sitting tenant, assuming the tenant was a good one.

    Knowing a tenant has costs to move, I'd probably lower it to current market, and if the tenant still wanted cheaper still, I'd lose them. It is the same risk as each time when market rent has risen with a sitting tenant, I increase but usually not too much to scare them into looking elsewhere.
     
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  12. MB18

    MB18 Well-Known Member

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    As far as the original OP is concerned, 5k might sound reasonable especially if a move is inevitable but not every tenant is financially motivated.
    By the sounds of it they only moved a couple of months ago and 5k might not represent much money to them anyway.

    Regarding rental prices falling will be a matter of opinion.
    I've just signed a lease a couple of streets over as comparable rentals were 20% less than i was paying. Landlord/agent was of the opinion vacancies were increasing but prices holding steady (which makes no sense).
    I gave my termination notice and only then he decided to try and negotiate I had already signed elsewhere.
    The property is now advertised for rent at 10% less than the 'pricing holding steady' scenario.
     
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  13. Melbourne_guy

    Melbourne_guy Well-Known Member

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    Good result for the OP. With transferring of risk, hassle, inconvenience and a potential loss of rental income to the buyers, the potential for the tenant to cause damage during the remainder of the tenancy and the additional burdens of tax, negative gearing costs (assuming there are costs) and calculating depreciation, that overall is worth more than $5k. The buyers must love the place.
    Personally @$5k for me its a no deal to move;
    @$10k I'm thinking about it; and
    @$15k I'm packing :D
     
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