Tenants who Want to Rent for Forever

I love tenants like the below.....


Why we want to rent forever

 

Yep, long term stability is best for all parties involved.

I remember there was debate on Somersoft about higher turnover of tenants being better but I don't buy it at all.

 

They have probably done the calculations and worked out that it is cheaper to rent than buy.

 

Tenants are no longer just people who can't afford real estate, I manage properties in the $700 to $1500 per week range, these tenants can certainly afford their own home, a lot of them make more money than our landlord clients who own the properties.

It's a choice to rent and there are so many benefits to it.

Some of our tenants also have properties that we are leasing for them, they just prefer to rent a nicer home that someone else looks after.

 

I see a lot of people like this in Sydney...the real question is how disciplined they are with the excess funds.

When you own...you are disciplined to pay off a mortgage..not everyone is that disciplined.

It will certainly be interesting to revisit to see how these people go.

Remember that $700 to $1500 is serious coin in Adealaide...not many people earn over 150k-300k in Adelaide vs Sydney. Where are you getting $700 to $1500 pw rents in Adelaide??

 

Sash - Eastern suburbs, Kensington, Norwood...

 

There are rich people in Adelaide too.

 

When you put it like that, it does sound appealing!!

 

With the poor yields in many blue chip close to CBD suburbs in capitals across Australia, for many it makes sense where they want to live in a house worth 1-2m for $600pw, then invest where the returns are.

 

It's so funny and confusing to some of our junior staff when they are just starting and they cant get their head around why some people's names appear on our tenant and landlord lists and how can they be both tenant and landlords.

 

Yes thought so...pretty much the premium end of Adealaide...

 

Works if you are extremely disciplined...but most are not.

 

Many of our tenants that are leasing these properties are doing it through a company - the company rents the property, they are getting tax benefits for leasing a gorgeous house. They know what they are doing.

We also invoice them for rent like we do with commercial tenants - done a bit differently but still residential.

 

Yes...I know all about that.

Know a lot of people like that....they rely on too much their advisors...

 

Hi Xenia, I have found a lot of agents wont even consider this in my recent enquiries and will only rent to an individual. Is renting to companies generally not a normal thing that property managers in SA understand/allow?

 

I don't believe that many property managers in SA would be able to screen companies or get these deals across the line for their clients. It boarders on commercial, is not normal and takes some creative efforts.

We took one of our client's properties from $700 per week (he was self managing the normal way) to $995 per week just by changing the way the leases were done and targeting the right tenants.

Not every property is suited and not every company is considered.

 

Thanks Xenia. I expect a personal guarantee would be required from the company directors? Sounds like a lot of work for a run of the mill PM who doesnt think outside the box like you do... getting half the managers to return calls or actually show properties to be able to lease them is challenge enough at the moment! I can see why many wont consider it.

 

yes the company directors provide personal guarantees and are screened as normal tenants.

most property managers who have a "job"in a company that is not their own business won't even be able to get their head around how to do it, let alone offer it to a client and create it from scratch - too difficult and they would rather just take a normal tenant.

 

A mate of mine is renting a 3 bedroom penthouse apartment on Newcastle beach.

He does 6 developments a year and has a 30+ portfolio of properties. He prefers to pay $850 a week in rent for the flexibility of moving somewhere else when he wants a change.

If someone is doing smart investment and like that choice then all power to them. Chosing to rent and then spending the savings on trinkets is a different story.

 

Makes sense.

I was trying to explain this to my family the other day and they wouldn't agree on it as they have never rented before being Italian and all they would see renting as some sort of life failure. Damn old chocs lol