Using feedback is a great way to determine the rental value of a property. Open homes should not be about standing at a door and letting people through, they are about actively getting to know your market, what they want and what they’re willing to spend. It’s also about getting to know your tenants and whether or not they would be a suitable fit for your property.
Landlords are sometimes advised to perform certain tasks to ensure a good tenant is happy with the property and want to continue leasing. Good property managers will always ask potential tenants for feedback after a property viewing to ensure they get the best price for a property.
I ask potential tenants for feedback and what they did/didn’t like about a property and out of every open home, I find that the majority of tenants share consistently similar views. For example:
- Too expensive- although your house maybe great value, it is only worth what tenants will rent it for
- No ceiling fans or air-conditioning
- Backyard is too small
- No cupboards, carparks, fencing etc.
Many landlords need to consider prioritising which tenant requests are worth following through with and whether those additions benefit a landlord in the long run. Below is a case study to help landlords determine plausible expenses made for a tenant.
Mark brought his investment property eight months ago. Originally his tenant only wanted to sign a six-month lease to see if she liked the property. Throughout the six months she proved to be a good, reliable tenant. The tenant is a single Mum with two daughters and has two main concerns with the property.The property is hot and she would like ceiling fans. She would also like a security door as there is nothing between her and an intruder and she is concerned about safety. She agreed to sign a twelve-month lease after her six month lease but has made two requests since resigning.
Things for the landlord to consider:
- Does the owner have a legal obligation to fulfil the tenants needs?
- Has the property been priced accordingly? For instance, has it been priced in respect to having no ceiling fans?
- Do other properties of similar value have ceiling fans? Tenants will often look at this towards the end of their lease.
The owner has every right to say no to these requests and many often do. They do not want to foot the expenses as it seems too costly.
But let’s look further into the future. I asked Mark how much he was quoted for the fans and the door and what his rental return was. I also asked him whether he liked his tenants and if his interest was in keeping them. I then broke it down like this:
Rent: $480 per week
Ceiling fans including installation $500
Security door: $500
Items that are installed for the benefit of the tenants while they are currently renting are most likely tax deductable.
The tenants enjoy the property and are proving to be good tenants. Losing them at the end of the lease may run the risk of a vacant property, which, if unleased for a number of weeks, could add up financially.
In an ideal world with regular open homes and actively searching for new tenants, the house could be leased within days of the previous tenants vacating, however, we don’t always live in an ideal world and it is often better financially to keep a good tenant happy and onboard, then to run the risk of a vacant home.
Therefore, the property manager, at the request of the landlord, will enter into negotiation. The landlord may want to ask the tenant if there is one item they would prefer have and agree on that. The landlord may offer to do both, over a particular period of time. The landlord may also consider which item is more likely to add value to their investment and decide to install only that item.
The property manager will help determine which one would be more beneficial and liaise with the tenant and landlord in order to come to an agreement that makes both parties happy. The landlord may also just say no, but must ask themselves first, is this the best option long-term? And then base your decision around those considerations.
By Nikki Heindl
P: 0434 710 495