Hi all,
I have just recently purchased my first investment property. Big thanks to all those who helped along the way. It it really appreciated.
This property has yet to reach settlement and it is currently has tenant who are paying $370 a week. They have not had a rent raised in 3 years. It would appear that the tenant looks after the place quite well.
The current PM provided me with a rent appraisal of $385-$400 but when I called her asking whether the current tenant would accept a rise in rent to $385 she claimed the tenants would likely leave. She believes she can get a new tenant in two weeks. She recommends raising it to only $380 and keep the current tenants.
A rough calculation would mean the following:
Loss of Rent = 3 x $370 (2 weeks to get new tenant + 1 weeks letting fee) = 1110
Number of weeks to regain loss with rent raise (optimistic) = $1110/($400 - $370) = 37 weeks
How much should I raise the rent and should I risk losing the current tenant?
I should also note that the current PM has only three years experience and is currently managing 170-180 properties. I think this rather a lot for some one with only three years of experience. But since I'm new to this I'm not sure. Is this a lot for a PM to handle? Since she already works with current tenant this could be a plus. What do others think? Would it be in my best interest to find another PM or stay with the current one?
I wonder what others would do in this situation?
Big Big Thanks
Dean
I have just recently purchased my first investment property. Big thanks to all those who helped along the way. It it really appreciated.
This property has yet to reach settlement and it is currently has tenant who are paying $370 a week. They have not had a rent raised in 3 years. It would appear that the tenant looks after the place quite well.
The current PM provided me with a rent appraisal of $385-$400 but when I called her asking whether the current tenant would accept a rise in rent to $385 she claimed the tenants would likely leave. She believes she can get a new tenant in two weeks. She recommends raising it to only $380 and keep the current tenants.
A rough calculation would mean the following:
Loss of Rent = 3 x $370 (2 weeks to get new tenant + 1 weeks letting fee) = 1110
Number of weeks to regain loss with rent raise (optimistic) = $1110/($400 - $370) = 37 weeks
How much should I raise the rent and should I risk losing the current tenant?
I should also note that the current PM has only three years experience and is currently managing 170-180 properties. I think this rather a lot for some one with only three years of experience. But since I'm new to this I'm not sure. Is this a lot for a PM to handle? Since she already works with current tenant this could be a plus. What do others think? Would it be in my best interest to find another PM or stay with the current one?
I wonder what others would do in this situation?
Big Big Thanks
Dean