Hi everyone,
If PMs get a letting fee when they find a new tenant, what incentive is there for them to find a long term tenant? Surely they’d get more money out of finding short term tenants – the shorter the better!
What’s the solution?
Adam
Don’t let life get in the way of living.
1) Advertise for longer ther tenants.
2) Check the prospective tenants previous tenant history. Do they more around a lot?
3) Divorcees with teenage kids, tend not to move as often (unless kicked out).Really though do you want to sign a tenant on a long term lease only to have them be a dodgy tenant. A short term lease to start does not mean a short term tenant.
My first lease was 6 months, stayed 5 years, was periodic for the other 4.5 years.
Mal
Getting out of your comfort zone, can help you become comfortable
Hi Adam
CAREFUL tenant selection is always the key, and it is an art form. Some PM’s just don’t care. Good tenants don’t move as often as bad ones. They don’t have to.
Ensure that your PM selects tenants with a verifiable and good history, previous rental record with an agent – not a private rental, adequate income for the rent level, appropriate socioeconomic match for your property – don’t put ferals in a mansion, good reasons for wanting to rent that property in that area, good reasons for leaving the previous property, high level of disclosure on the tenancy application, no mistakes or lies, no inexplicable sense of urgency, clean & tidy well maintained vehicle, same with personal grooming. If they pass that, any problems should be minor.
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi adambc
One solution is to not pay the letting fee. Be it through managing the property yourself, or by negotiation, make sure you pay as little as possible in the way of a management fee.
Property management is a straight forward business transaction, whereby the property manager ‘manages’ the property and in return the investor pays them a fee (the management fee) – end of story. I’m sure they will come up with many reasons why you should pay them the management fee: it covers the cost of doing checks on new tenants; it covers administration fees and office expenses. But, at the end of the day, these are just:
- Business costs (that they should meet through revenue – namely the management fee)
- A level of professionalism that they should be providing in the first place, and is the very reason you give them the business over the next property manager
Just imagine if investors were to start refusing to pay the fee, or better still matched the property manager’s letting fee with our own ‘administration/application fee’….
While we’re at it…have a think about Loan Application fees, what they are and why we pay them…
regards
longshanks
Originally posted by adambc:Hi everyone,
If PMs get a letting fee when they find a new tenant, what incentive is there for them to find a long term tenant? Surely they’d get more money out of finding short term tenants – the shorter the better!
What’s the solution?
Adam
Don’t let life get in the way of living.
I am not so sure that property managers are making much more money out of letting fees (usually 1 weeks rent, but some charge half a weeks rent) than they are making from the percentage of rent they are getting when the place remains occupied.
They are only earning the percentage of the rent when the place has tenants, so if is vacant for a couple of weeks before they find a new tenant- they are missing out on that percentage for 2 weeks.
Thyey’ll have to spend time to find you a new tenant- interviews, advertising, checking out applicants, lodging bond money, updating their administration for the new tenants etc.
It is much easlier and less work for them to just keep your property tenanted by the same tenants. Especially since PM’s are usually very busy looking after an large portfolio of properties.
Celivia
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