[VIC] The Best Way to Rent out an Apartment

frugalftw on 01/04/2020 - 15:10

Renting seems like a hot topic, now that we are transitioning from free-range into caged, the economy is down, etc. Just want to find out what you guys think is the best way to rent properties out.

  • If we all working remotely and having food delivered, there's not a lot going for city living, is there?
  • Is it best to hand properties off to agents?
  • How much do real estate agents charge? And do they all charge the same amount?
  • How do you find private tenants?
  • What are some valuable lessons you've learned as a landlord?
  • Does the new policy change how you'd approach it now?
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Comments

  • popsiee on 01/04/2020 - 15:15
    +1

    With the 6 mths no eviction PM rule I would try to set up a deal or barter with something paid in advance hopefully privately . Rental markets for landlords is seriously you know what .

    • frugalftw on 01/04/2020 - 16:50

      Some friends have mentioned advanced payments are how they got their contracts before the pandemic. Isn't it difficult now because of the uncertainties everyone's facing? Or it's already from people's savings so it shouldn't matter right now, more of a 'next year' kind of problem.

      • hrayn3 on 01/04/2020 - 18:26

        I think in Vic rent in advance (more than a month) is illegal - not to say it doesn't happen, lots of agents 'suggest' you do it if you want to get a property, but yeah: illegal

        • Choc83 on 02/04/2020 - 11:10
          +1

          https://www.consumer.vic.gov.au/housing/renting/beginning-a-…

          *Rent in advance in a tenancy agreement
          If the rent is to be paid weekly, the landlord or agent cannot ask for more than 14 days’ rent at the beginning of a tenancy.

          In any other case, provided the rent is $350 a week or less, the landlord or agent cannot ask for more than one month’s rent in advance.

          The landlord or agent may be fined if they do not follow the above.

          If the rent is more than $350 a week, the landlord can charge rent in advance for the full term of the lease (unless the lease term is more than five years).*

  • Choc83 on 01/04/2020 - 15:26
    +1

    3 month Bond. Month 7 and month 10 are rent free. Return 1 month bond at the end of the tenancy.

    • frugalftw on 01/04/2020 - 16:50

      I like the month 7 and 10 idea :)

    • [Deactivated] on 01/04/2020 - 16:53

      This is illegal if the weekly rent is < $ 350

      The maximum Rental Bond that can be charged in Victoria is the equivalent of 1 month's rent when the weekly rent is $350 or less. The Rental Bond must be deposited with the Residential Tenancies Bond Authority. A Rental Bond is the only form of security that a landlord can require or accept from a tenant.

      • Choc83 on 01/04/2020 - 17:05

        so it's a legal solution for all weekly rents that are $351 and over?

        • [Deactivated] on 01/04/2020 - 17:19

          3 month Bond.

          Not sure if this is legal but I do know that the bond must be lodged with the RTBA who will hold it in trust until the end of the lease, when the bond is:

          • refunded entirely to the tenant/resident, or
          • claimed in part or in full by the landlord

          Penalties may apply if the tenant reports you for non-lodgement.

          It is illegal for a tenant to request that the bond be used to make a rent payment and the tenant is legally required to pay rent up until they vacate the premises and hand over the keys to the landlord.

          Return 1 month bond at the end of the tenancy.

          If the landlord wants part or all of the bond, the tenant has three options:

          • agree with the landlord about the amount to be paid to them
          • disagree with the landlord and apply for free to VCAT to get your bond back
          • the landlord applies to VCAT and tenant comes to defend his case.

          You can't just withhold part of their bond because you feel like it.

          P.s: People who are willing, and able, to pay 3 months' bond , are not going to be looking at apartments during a lock-down. They will want some outdoor space, at the very least.

          • Choc83 on 01/04/2020 - 17:33

            @[Deactivated]: Right, looks like the Bond is messy.

            How about, say the monthly rent was $2000

            Month 1: $6000
            Month 2-6: $2000
            Month 7: $0
            Months 8-9: $2000
            Month 10: $0
            Month 11-12: $2000

            Depends on the apartment. Presumably in a good location that will be useful once the ban is lifted.

            • [Deactivated] on 01/04/2020 - 17:40

              @Choc83:

              Month 1: $6000

              For a bachelor's pad ? LOL! Good luck with that.

              For example, this is only $800 per week. It is fully furnished, has cityscape views , stylish bathroom with double shower, large European laundry with washing machine, 24 hours concierge , half acre roof top garden, massage room, fully equipped gym, 25 m indoor heated lap pool, sauna, steam room, BBQ with seating area …etc

              Pay first month and if the tenant loses their job, they can stay for free for another 5 months. Why would they choose Op's apartment with it's 3 months up-front rent over this?

              • frugalftw on 01/04/2020 - 19:12

                @[Deactivated]: I think he meant to have that inflated 1st month rent to cover for the rent free months 7 and 10. I'm more on $400 pw if anything. Prefer long term, steady tenants. Interviewing also costs a lot of time.

                • [Deactivated] on 01/04/2020 - 19:47

                  @frugalftw: I get that but you can't ask for 3 months rent in advance in the current economy. No one's going to bite.

                  • Choc83 on 01/04/2020 - 20:21

                    @[Deactivated]: Like I said, depends how much they want the property. Back when I was renting/applying to places, the best ones often had a clandestine bidding war, where the person paying $x over the odds would get it.

                    There's other ways. Maybe month 11 is half rent that the tenant pockets as a sweetener.

                    My issue is that if there's a 6 month moratorium on evictions, and you're establishing a contract now, you want to see something from the new tenant to show you that they're genuine and not going to go on a rent strike in month 2.

              • [Deactivated] on 01/04/2020 - 21:04

                @[Deactivated]: $800pw for an apartment where the only bedroom doesn't even have a window?

                • [Deactivated] on 01/04/2020 - 21:31

                  @[Deactivated]: Yep and even that works out less than the initial payment of $6000 in the calculation above.

                  • [Deactivated] on 01/04/2020 - 21:51

                    @[Deactivated]: I'm still incredulous at that weekly rental for a window-less 1BRM apartment! No natural ventilation/light unless you leave the bedroom door open along with the balcony door.

                    And guests can only access the only WC via the bedroom.

                    It may as well be converted to a studio!

                    • [Deactivated] on 01/04/2020 - 22:06

                      @[Deactivated]: Looks like I was wrong. From the blurb from when it was sold :

                      With its coveted north-easterly aspect and floor-to-ceiling windows opening onto a full-length balcony, it offers breathtaking, protected views over the entire CBD and the Yarra River.

                      It's a 1 bedroom, you can always leave the door open, I guess.

                      But yes, it'll be interesting to see how long it stays on the market.

  • rambutann on 01/04/2020 - 16:35
    +3

    If we all working remotely and having food delivered, there's not a lot going for city living, is there?
    I dont think this will be the case. People aren't going to move out of the city to deal with a pandemic unless they already have a property to go to (e.g. holiday home).

    Is it best to hand properties off to agents?
    In my opinion, yes.

    How much do real estate agents charge? And do they all charge the same amount?
    They do not charge the same amount. There are various fees, but the main one would be the rental commission. I pay 5% on one property, and about 7% on the other. The 5% one is pretty bad. I'd put them both through the 7% company if I had to find a new tenant. The only reason im with the 5% company is because they sold me the property and there was already a tenant in there.

    How do you find private tenants?
    Sign spinning in the streets. (I don't)

    What are some valuable lessons you've learned as a landlord?
    Treat tenants with respect. Dont be an a-hole. It will make life a lot easier.
    Examples: If something is broken, fix it. If the tenant requests an air conditioner and you know the property does in fact need an air conditioner, and they are a good tenant, get them a damn air conditioner.
    I'm lucky enough to have only dealt with one tenant in each of my two properties (it has been years). I have always requested them to continually re-sign leases. I'll often give them an ultimatum of small price increase or 12 month contract. When one of them requested an aircon, I gave it to them under the provision that they would sign a 12 month contract.

    Does the new policy change how you'd approach it now?
    I mean.. I wouldnt be buying property right about now.. but besides that, I feel like I would work on a solution with my tenants before looking at eviction. If I had to rent out one of the properties I would just do it at a lower price to get a wider pool to choose from.
    At the end of the day, property is an investment. There are high points and there are low points. Just gotta roll with the punches.

    I'm the biggest cheapo known to man - but i'd take a lower rental income if it means less hassles & less long term risk.

    • [Deactivated] on 01/04/2020 - 16:55

      Treat tenants with respect. Dont be an a-hole. It will make life a lot easier.

      This ⬆ and this ⬇

      take a lower rental income if it means less hassles & less long term risk.

    • frugalftw on 01/04/2020 - 16:58

      Thank you for the write up :)

      Treat tenants with respect. Dont be an a-hole. It will make life a lot easier.

      I think my tenants would be very lucky, because I'm a special kind of an a-hole :P

      I'll often give them an ultimatum of small price increase or 12 month contract.

      So you don't increase the rent automatically? With a contract, I'd be happy to provide a lot of things, provided they aren't crazy requests like a car. Do you take breaks to renovate the place in-between tenants?

      I'm the biggest cheapo known to man - but i'd take a lower rental income if it means less hassles & less long term risk.

      The only consideration with pricing is if there's a correlation between tenant quality and income. I guess not.

  • [Deactivated] on 01/04/2020 - 16:50

    Does it have a balcony?

    • frugalftw on 01/04/2020 - 16:59

      Yes. But no jumping off please.

      • [Deactivated] on 01/04/2020 - 17:00

        I was just thinking how horrible it would be to be cooped up in an apartment for months with kids.

        • frugalftw on 01/04/2020 - 17:03

          lol That'd be difficult. It's more of a bachelors' pad, kids are not recommended.

  • caramellokoala on 01/04/2020 - 17:02
    +2

    translation: My Airbnb is now empty. How do I dig up?

    • frugalftw on 01/04/2020 - 17:04

      Haven't thought about Airbnb, used it plenty tho as a guest.

      • Choc83 on 01/04/2020 - 17:07

        not a lot of travellers in this climate

  • Pikaloo on 01/04/2020 - 17:09

    using the fairyfloss facebook group

  • popsiee on 01/04/2020 - 17:37

    It be a bit hard but also could sign a lease with someone in the essential services if a real estate agent could do some work and target this group .

    • frugalftw on 01/04/2020 - 19:46

      Never thought the day would come to only look for Austpost delivery guys…

  • HeWhoKnows on 02/04/2020 - 11:16
    -1

    Agents have got thier act together on this one but may be overrun with 1 to 1 appointments so best if you organise yourself.
    Much more flexibility
    Advertise on Facebook and Gumtree for FREE

    Make sure you have sanitiser at hand at the inspections

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