which is preferred from PM perspective: FIXED/Periodic

Just wondering

from a PM perspective.
are Fixed / periodic preferred? eg are tenants more or less difficult on periodic/fixed?

from a principal perspective
are Fixed / periodic preferred? eg guaranteed income for fixed? or do they not care,
it also depends on the agency, some agencies cahrge 0.5-1 weeks rent for a lease renewal, while some agencies charge a lease prep fee of $50 or similar

edit: i have a PM call me and ask me if I want to resign a tenant who has been periodic for over a year, and I reply "Only if you waive or reduce the 1 week reletting fee".........the call ends pretty quickly after that

 

Yes, resigning generates a reletting fee but also adds value to the rent roll.

On the other side of the coin it provides a better period of notice for termination at the end of the lease.

 

It is vital for PMs to always act in the best interests of the landlord/owner...many investors prefer the security of a longer term i.e. 12 month lease to a well screened tenant (unless the property is a short term corporate rental OR the owner requests periodical for other valid reasons) - at the end of the day it is critical to act upon the instruction of the owner and to always act in the best interest of the owner

 

Rules are a little different per state, but I'd imagine Fixed is far and away preferred.

Advantages
- Better notice periods for agent-initiated ending
- Better (from LL/PM perspective) notice periods for tenant-initiated ending
- Secure income for client (LL)
- Better costs for the LL (less letting fees / advertising and ingoing/outgoing inspections)
- Less maintenance for the LL/PM (more tenants = more wear and tear)

 

Fixed all the way for me. Much more certainty - which is important with any investment.

 

HILARIOUS. I think you answered your own question

 

Don't some insurance companies refuse to pay out on periodic leases?

 

Fixed is better IMO from PM and owner perspective. I don't agree with charging to prepare the lease though.

 

Check your landlord insurance.

Some policies or sections may only cover tenants under a fixed term.

The other benefit with fixed is you can have it end on a date that has the highest tenant demand and not a dead period.

 

I'll second the insurance comments - some won't pay out if the tenant is on a periodic lease, or they'll reduce any loss of rent claims. Also I'll have to double check, but I don't recall ever being charged another letting fee when re-signing an existing tenant, only for signing up a new one.

 

Varies per agency and also per state. It's commonly charged in SA.

 

Aahh ok I don't have any in SA. Bit rich to charge that though for sending out some paperwork! Still, I'm sure SA has nothing on WA when it comes to pm charges.

 

You pay a 1 week reletting fee? Bugger that. I pay $30. That's all it costs them to get the tenant to sign the paper. They are not advertising, looking for a tenant or holding open homes.

 

Also when you have multiple properties, you need to stagger end dates and not end up with several vacant at the same time.

 

Its a SA thing unfortunately.

Simply pure greed
However they will all try to justify it without a valid reason

Howevee since everyone is doing it they have a monopoly on it so you have to accept it.

Am waiting for the day when a new player comes in and shakes the market up

 

I don't mind paying extra for irregular/unexpected work and requires a lot of extra work - eg rep at tribunal, new lease

Reletting is something that happens regularly and predictably and should be included in the management fee.

 

Question for PMs. How good is the software you use at managing what you have to do?

If I was self-managing I would just diarise what needed to be done when. With 8 properties that's manageable. If I was managing 100+ I'd want software that spat out condition report notices, re leases etc. Does the software you use do that?

How good is it at bunching all that work together? eg does it 'order' you to send out condition inspection notices all at once, then do all the inspections on one day, then all re leases on one other day etc?

 

Same as WA. New business opportunity for some pc members maybe?

 

Give it a try

 

haha DT no way, I don't have the patience! Hats off to you