6 Reasons tenants leave

Blackbird and Finch Blog - 6 reasons why tenants leave

6 Reasons tenants leave

Blackbird and Finch Blog - 6 reasons why tenants leaveA vacant property can and does affect not only your cash flow but your yield. A quality property manager and a solid marketing plan can help find a tenant quickly, but often being aware of why a tenant is leaving can save you the added costs of securing a new tenant.

These 6 issues seem to be the most common reason why tenants leave.

1. Lack of maintenance

Good quality tenants love their home and often make suggestions to improve the home. These requests may include cleaning the gutters or fixing small maintenance issues. While some requests/suggestions can be excessive, responding to the maintenance by attending or advising the tenant why it is not proceeding, keeps the tenant informed and demonstrates that they are a part of the process.

2. The Property Manager

Unfortunately, this is a little more common than expected. Many inexperienced Property Managers treat tenants unfairly, often not giving them time to address their concerns or even responding to any issues. Tenants may feel bullied or like second-class citizens and will most likely move as soon as they can if the Property Manager is the issue.

3. Rent increase

Many tenants are aware that rent can be increased by CPI. They monitor the rental market and may are conscious of the current market conditions. Increasing your tenant’s rent in a high vacancy market may prompt them to see what other properties are available.

4. Change of circumstances

The most common reason for a tenant to break their lease or not renew it is a change in their circumstances. Children grow up; marriages and partnerships breakdown and job changes, are all valid reason why a tenant may choose not to renew the lease, and is one of the issues that an owner may not be able to help or prevent.

5. Lack of features

Renting a home in winter with a fireplace seems like a great idea, but often summer comes and the tenants want to be able to cool the home down with an air conditioner or fans.

Including features such as air conditioners, dishwasher, or security screens can all be added incentives for a tenant to remain in a property.

6. Short-term leases

Many new investors are fearful of locking a tenant in a lease for more than 6 months, however, this can make a tenant uneasy as they feel they do not have a long-term secure home. Discussing lease term options with tenants is key in building a good relationship.

Communication is the key to maintaining a good relationship with your tenant. Quality tenants are worth holding onto and if there is something that can be done to ensure they remain your tenant it may be worthwhile. After all, a tenant is an integral part of successful property investment. Don’t let yours get away if they are worth holding onto.

Take your agent for a test drive

Blackbird and Finch Blog - Take your agent for a test drive

Take your potential agent for a test drive (part 1)

Blackbird and Finch Blog - Take your potential agent for a test driveLooking to sell your home or investment property in the near future or rent out your home? If you haven’t selected an agent to work with, a great way to shortlist potential candidates is to take them for a test drive, just like you would if you were buying a car.

I would recommend clearing your diary from 10am-2pm on a Saturday and either buy The Chronicle or check out www.realestate.com.au and select four or five agents to visit. There are many factors to consider when selecting an agent, in fact, you could write a whole book about it. Characteristics important to one person won’t be important to another person, so here are a couple of tests to give you a starting point.

1. The ‘are they on-time test’

A regular complaint about real estate agents, salespeople or property managers is that they are always running late. Prospective buyers or tenants have been waiting out the front of the property to inspect it and the agent arrives 5-10 minutes late. I have even heard of property managers that didn’t turn up at all for a scheduled inspection, leaving the existing tenant to show prospective tenants through.

Yes, sometimes things happen, but an organised, systemised, real estate professional will have processes in place to deal with this. Agents that don’t allow sufficient time to finalise the last open home, lock-up the property, travel to the next inspection and set up the next inspection are doing a disservice to their client and customers.

I recommend arriving for each test drive open homes 5 minutes early to see if the agent is on-site and ready to go and if they aren’t ready to see how late they do arrive.

2. The ‘why are they selling test’

I like to conduct this test on agents that I am conjuncting with (they have the relationship with the seller and I have the relationship with an interested buyer).

It has always astounded me what an agent will tell you just by asking the question “why are they selling”. I’ve heard about the death or sickness of a family member, separation or divorce, the sellers have purchased another house and have bridging finance or they are in financial difficulty.

Some sellers may be comfortable for their agent to disclose their reason for selling, but I believe it is only courteous to ask the Seller what they would like you to say.

Now, it is really nobody’s business why anyone is selling their property. All a buyer needs to know is that the seller has no further use for the property. The reason buyers ask this question is simply to determine if there is an element of desperation to the seller’s reason for the property to be on the market. Or to put it bluntly, is there an opportunity to grab a bargain as the sellers are highly motivated and the property must be sold?

I believe that agents that divulge the seller’s real reason for selling are doing a disservice to their clients. When asked this question, an agent should just deflect this back to the buyer by asking them why they are looking to purchase to try and find out the buyers motivation.

3. The ‘how negotiable are the seller’s test’

On your agent test drive, I would recommend throwing in this supplementary question after the agent has responded to your questions on why the sellers are selling. Again, it amazes me how often an agent will give away money that is not theirs to give away.

Now we all know that most advertised prices are negotiable, but an agent needs to answer this question as though the sellers are in the room listening.

Based on the three tests above, as you leave each open house, ask yourself the question, “do I want that agent representing me and my property?” In the next blog I’ll give you a couple more tests for your potential agent.

How to rent to family or friends and not start a food fight

Blackbird and Finch Blog - How to rent to family and friends and not start a food fight

How to rent to family or friends and not start a food fight

Blackbird and Finch Blog - How to rent to family and friends and not start a food fightRenting to family members can often cause the biggest family disputes. Family barbeques can turn into World War 3 with just a snide comment or overheard word. Somehow the ‘tenant’ is made to feel less of a person than the ‘landlord’ in the relationship which can cause conflict. More often than not, siblings renting to each other seems to be the main relationship that can cause the most tension.

Understanding both sides of the transaction can help maintain the relationship and meet the financial goals of everyone involved. After successfully renting to family myself, I would like to pass on a few of my best tips on maintaining a good family relationship with a business one.

Treat the property like a business

The landlord’s property is a business. It is designed to create wealth through property growth and rental yield, giving them a secure financial future. Making sure that everyone is aware of this at the start makes it a little easier in the long term. Using terms like ‘nest egg property’ and ‘superannuation house’ might help the tenants understand that this is a business and not a favour.

Set boundaries

Depending on your relationship, setting clear boundaries can help maintain a separate relationship. Boundaries could include:

– All queries regarding the property, rent, maintenance and lease should be in email form only
– No talking about the rental at family or social gatherings.

Keep inspections separate

You may wish to negotiate inspections with the tenants as you may be visiting the property more than a standard landlord. I recommend not commenting on the property condition while at the property socially as this can really upset a tenant and you might not be invited back.

Know the rules

There can be tax implications and insurance implications when renting to family members. Insurance policies can state that three-monthly inspections must be carried out and if you fail to do these, you may not be able to claim any insurance. Check your policies thoroughly.

Make the tenants feel important

Why? Because they are. You as the landlord are receiving rent from them, but you also have the peace of mind that they are looking after the property like it’s their own. If you don’t have that peace of mind, you shouldn’t rent to them. If you feel obliged to rent to a family member (e.g. your mother-in-law wants you to) but you are not entirely happy about it – engage a property manager to manage the property for you.

Engage an experienced property manager

You may be thinking that renting to family or friends might save you money in agent fees. Yes, it will, but if things go wrong it could cost you your relationship with the tenant. Are you prepared for that to be an outcome?

If tensions are rising and you are not seeing eye-to-eye, contact an agent immediately, don’t let it get out of hand. Hiring an agent will allow each party to air their grievances and have an expert guide them in what can be done to rectify any problems.

Even if you do engage a property manager, maintain the rule at the family barbeque of not talking about the rental property to ensure that a food fight doesn’t break out.