Taking over rental management - transfer of rental agreement to self

Hi Brains Trust

I have an apartment rented to a friend who has been there for 5 years no problem. I originally gave the tenancy to an agent to manage as I was heading overseas. Now I am back, and the existing agency has been bought out by a larger organisation, I want to take the rental management back off the agency. Have spoken to my tenant who is keen and I am giving him part of the discount. Ordinarily we sort any problems between ourselves and don't even include the agency, he's a great tenant and has stated he hopes to buy the place off me one day so I trust him as far as these things go.

Can I get the existing lease transferred to myself and then give the tenant a discount? Or do I need to give notice with the existing agency and provide a new lease to my tenant? Any tips on how to proceed greatly appreciated!

The property is in QLD

 

The lease is currently periodic, not fixed

 

Hi MK101,

A property manager is an agent for yourself, "it's all yours", they don't own the lease or anything like that, they're simply your agent doing the 'work' in place of you.

You just send them an email, "Hi PM, I'm self-managing the unit, please prepare the property files and keys for handover and let me know when to come collect, ta"

Also, just some food for thought:
1. Never trust anything a tenant says
2. Don't do tenants any favours at your own (possible) expense
3. You need to be even more vigilant with management when 'friendlies' are involved, when it comes to money relationships can quickly sour/be abused
4. I highly recommend you take out Landlords Insurance cover if you don't already have it, no matter how 'safe' the arrangement may seem

 

Wow thanks Michael. Yes have landlords insurance. Any ideas how I go about lowering the lease amount, can I issue an adjustment to the existing lease or need to sign a new one?

 

I'm not familiar with other States rules etc, in Qld, and I'm assuming the principal is the same where ever, if all parties to a contract mutually agree anything can be done and it should just be documented appropriately. From what I've read in other threads about PM fees in Sydney, it seems highly competitive and rates are rather low, like 5% or under, is it really worth saving a few tax-deductible dollars at the expense of not having a professional manage it for you?

 

Doesn't really matter if he's keen or not, if you want to manage the property you can...and why give him a discount? Is the rent too high?

Famous last words.
I've seen great tenants turn ugly when there's a problem.

-Check your agency agreement for the termination period, 30/60/90 days....
-Give appropriate notice to agency
-Get copies of everything you can including tenant ledger.
-Advise tenant of changes and provide bank details.
-Confirm "paid to" date with tenant so you're all on the same page.
Dont give them a discount.
......and because you've just lost 50-100% of your "insurance" managing it yourself, definitely make sure you get good landlord insurance, they will ask if you have a managing agent or not.

 

For the sake of forgoing 1/2 the management fee (it equates to the same as you'd lose to the taxman) you're now going to give it to your 'mate'. Just tell him that 'you'll keep the rent at the same level this year rather than increasing it by 5% as advised by the agent', if the market hasn't moved they'll still feel special and you've given up nothing.

 

Thanks for the input all, you making me reconsider! (which is much appreciated)

 

Risks aside, assuming you go ahead- I'd be recommending you get him to sign a fixed term tenancy at the lower rent you agreed. If he plans to stay there forever, why is he on a periodic tenancy? He can leave with two weeks notice at any time, leaving you to either advertise yourself (fraught with risk) or go back and find another agency.