What I thought was a gem might now be a real head-ache afterall! What can I do to turn it into the diamond I imagined it to be?? This is the situation.
I recently purchase a block of 5 units at $148,000.
That works out to be less than $30k each. The rent on each is: $80, $70, $60 and two vacant but newly renovated. The agent has told me that they can be EASILY rented out for about $85 each (most other units around that area are rented for that or more). So I was hopeful. If I rented only one for that amount, then it would comply with the 11 second rule.This is the situation today (one month after purchase, taking into account the christmas holiday period where everything shuts down and nothing gets done)
2 vacant. (no change)
$70 unit – was not paying rent on time, moved out
$60 unit – was thinking of upping the rent once the lease expires, three noisy young adults (instead of one as the lease states)
$80 unit – feeling neglect , no renovations cause she has been there 5 yrs
– annoyed , other tenants paying less rent and noisy neighbours
– wants new security door (I will install soon), carpet and yesterday tiles from bathroom just fell down and needs replacing!How can I transform this uncut diamond to the diamond that it promises to be?
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Tomorrow, you might wish you started today.
#####################Angie,
Bring on the problems!
If it were me I’d immediately sack the rental manager and also look to terminate the lease of the rowdy young adults (for breach of lease).
Then I’d go back to the good tenant and ask her for the names of any people she might know who might be interested in renting the units. Offer her one month’s rent free for each referral that ends up signing a lease (since that is what you would pay as a letting fee anyway).
Commit to giving the units a community theme if possible as I’ve founf that getting the right mix of tenants is the biggest success factor in a block of units.
Use the template in Buyer Beware to shop around for a new rental manager. Then offer an incentive package to new tenants to encourage them to rent with you.
Regards,
Steve McKnight
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Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Angie, as I can se you are disapointed with your purchase. Mate let me know where your units are and tell me if you want to sell because i will buy them from you.
regards
TonyHi Angie,
With regards to the tiles (a little problem compared to the rest) there is a new panel, I think it’s called Lamipanel (sold at bunnings). It looks like tiles, but it’s one sheet and you can install it yourself. Apparantly you can put it straight over tiles or remove the tiles before hand. It is waterproof and guarenteed for a long time. It is expensive, but if you can do it yourself, it looks good and can be kept clean, won’t fall on someones toe and cut them etc, it might be worth it. With regards to screen wire doors, there are places that deal with ex-demo homes and they have sinks, bathtubs, doors, handles, knobs, etc that may make your life easier and take the sting out of the cost. Vinyl might be better than carpet. I guess we should put up a posting on reno jobs and how to save money. In fact I’ll do that now.
Cheers
Soosh [
]There are no problems, only solutions!
Thanks Steve and Sooshie for the great advice!
I would also like to thank Tony for offering to take the property off my hands, but I think that this should be a great learning experiance for me.. If I can make this work, then I can make anything work right? What doesn’t kill you can only make you stronger!
I changed real estate agents when I purchased the property, so hopefully this one will do a better job than the last one.
Question. In regards to:
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Then I’d go back to the good tenant and ask her for the names of any people she might know who might be interested in renting the units. Offer her one month’s rent free for each referral that ends up signing a lease (since that is what you would pay as a letting fee anyway).
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I was wondering if I found my own tenant (ie. the real estate didn’t find it for me) do I still have to pay the one month letting fee still to the agent as stated in the contract? If not, then I could give that to the good tenant as an incentive to stay and bring in her friends….
(thanks Steve)Also, I unfortunately live very far away from these properties, so a do-it-yourself fixup job is not really worth it, i think. By the time I get there, take leave, buy the stuff and do it myself, it would be more expensive than actually hireing someone else to do it for me (I would usually try to conn my brothers into doing them for me [
] ) There is a couple next door than does the maintenance for me, maybe I will ask them if they can fix it for me.. []Thanks again for the great advice!
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Tomorrow, you might wish you started today.
#####################Hi Angie,
You ask:
quote:
I was wondering if I found my own tenant (ie. the real estate didn’t find it for me) do I still have to pay the one month letting fee still to the agent as stated in the contract? If not, then I could give that to the good tenant as an incentive to stay and bring in her friends….
(thanks Steve)I wouldn’t imagine that you would have to pay anything to the r/e agent if you found your own tenant… but at the end of the day it would depend on what the listing agreement said.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
I was wondering if I found my own tenant (ie. the real estate didn’t find it for me) do I still have to pay the one month letting fee still to the agent as stated in the contract? If not, then I could give that to the good tenant as an incentive to stay and bring in her friends….
I would be very hesitant to finding your own tenant if you do not live close to the place where you unit is. One of the most important aspect in finding you own tenant is
1. the interview. Take the time to sit down with them for about 15 mins – yes thats all it takes and preferb if you dit it at the place were they are living at the moment. Usually tenants move to either upgrade or because their landlords wants them out especially in a red hot market like we are in at the moment. You can tell 95% about the tenat by looking at what they are living in now. Ask them why they wanna move…etc.
2. Reference checks. If you can get to speak to them in the current residence the only thing you need to check is that they pay on time. Other wise I usually ask for about 3 referencesAs a general rule of thumb if you can’t do the two, hand it to a agent. At least you have someone to blame if it goes wrong. Also with an agent in the rural center they probably know what the tenant is going to be like by asking one of his extensive networks (small country town mentality – the gossip capital). He can do a much better job at screening off bad tenants than any of us from a distance.
Buy insurance – It much cheaper if you buy landlords insurance with building insurance together.
Anyway I thought that finding a tenant was only one weeks rent plus the lease fee of $15
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the only dumb question is the one that isn’t asked.
**************************************If you are thinking of finding you own tenant never ever… I mean never ever give your telephone number or contact details to the tenant or else you have broken the golden rule. You will end up hating yourself for this sole descision. It may look harmless but that tenant may accidently give it to another then another and before you know it you may recieve phone calls in the middle of the night complaining that their toilet is blocked, or a neighbour is noisy ….. etc.
Unless you are a trades person or you enjoy recieve strange phone calls… never ever give out your contact details. Let the agents earn their money.
[
]Yep, great advice! I know someone who had that problem once. Thanks for reminding me…
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Tomorrow, you might wish you started today.
#####################Hi……….this one month letting fee sounds high to me ….where I live the fee is one week and then 7% monthly. Perhaps it’s too late now, but for any further lettings you could negotiate….what’s the worst they can say? No, and then you’re no worse off. A quick check of other agents will let u know the normal deal for the area.[
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] ) There is a couple next door than does the maintenance for me, maybe I will ask them if they can fix it for me.. [
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