When a tenant tells you “it’s not you, it’s me” – it often is when it comes to negotiating a new lease.
If your tenant has indicated they want to move out of your property in, say, 3-6 months, there's usually little value in fretting about trying to lock them into a lease.
Perhaps they have ownership plans thanks to the raft of Federal Government support for First Home Buyers announced in this month's Budget. Alternatively, a new addition to the family might be on the way, and your tenants want to move closer to mum. Or perhaps they simply need a different property style because they are starting a home business.
Time to think clearly
The prospect of losing a tenant can be unnerving. However, if the tenant relationship has been smooth and your investment property is in a market with plenty of demand, then permitting the tenants stay as long as they want is usually a sensible course of action.
Market conditions will play a significant part in this determination. In most markets around Australia apart from inner suburbs in some capital cities, rental demand is robust. As part of this decision-making, be sure to consider the costs of finding new tenants, such as advertising and the production of a new tenancy agreement.
Whether you pay the costs of finding a new tenant now or closer to the vacate time is moot, especially if the tenant has a current tenancy agreement. However, if the tenant is out of contract, a decision to try and lock in the next tenant could depend on whether you have the cash flow to cover the costs of advertising and so on. On this basis, talking with your accountant is probably a smart move.
As for the right time to start advertising, waiting until about three weeks before the tenant vacates is usually best. The point is that most tenants seeking new accommodation won't start looking for their next rental digs until virtually the last minute – so advertising a property's availability in three months won't attract many eyeballs. Moreover, the property will drop down the listings on the property portals.
To find a suitable rental property, contact your local Raine & Hone Property Manager.