Landlords of Ozb How Would You Feel if Tenant Reached out Directly?

Firstly I just want to say that I'm asking this as a general question not necessarily in relation to my own situation but recently I received a notice of rent increase and am going to try and negotiate a fairer rate. After reading this thread (tl;dr landlord wants to leave rent the same but agency is pressuring to up it so they can increase their commissions) I'm thinking that I would be more successful if I were able to reach out to the landlord and negotiate the rent increase directly rather than through a middleman who has their own interests that oppose mine.

Lets assume for the exercise that you have a good tenant, pays rent on time and maintains the house to a high standard. How would you feel if your tenant reached out to you directly?

Comments

      • The actual reason for avoiding periodic leases is that their insurer will cover them until the end of the fixed term lease if the tenant leaves without paying (up to 26 weeks from some insurer)

        If it's on a periodic, the insurer only covers until the end of the legally required notice period that the tenant needs to give on a periodic.

        • Not correct, I have my long term tenants on periodic and insurance is definitely covered exactly the same as a fixed term agreement.

          • @bobwokeup: Which insurer are you with?

            Terri Scheer only pay until the earlier of re-let, end of lease or limit is reached. Given a periodic lease doesn't have an end date, I'd read that as the notice period (in Qld, 2 weeks). Admittedly, probably not an issue in the current market (where it would be re-let within a week or two).

            • @ol mate: I’m with AON who underwrite to CGU, who are useless with everything, but the policy I was on for years was amazing but not as good now. Still like you said it’s not so relevant in this market.

  • Sounds to me like the owners are mortgage stressed with interest rate rises and you are their solution.

    • -3

      That sounds like a 'them' problem, don't buy an investment during a rate increase period if you're worried about payments. Buy a different investment, like, literally anything else other than someones home.

      • +2

        Or maybe, just maybe, the property owner received advice and did their own research that the rental amount was severely under market value?

        I’ve just been through NCAT after calling my tenants bluff. The tribunal sided with me.

        An increase of 20%. First increase in 4 years. An LVR of <40%. A loan amount of ~$230k. Yet my costs (mostly interest) have gone up by over 30%.

        My tenant was questioned why they were wasting the tribunals time and told they should be lucky I’m not raising the rent higher.

        • Yes @extreme that could and also in cases is the case, but in others the owner simply wants to make the highest return, which is why a lot of properties are Airbnb'd. Which makes your rates higher, and the cost for everyone go up. It's a self eating problem, where too much profit hurts all involved.

        • -3

          One house for one person you leech.

          • @Anbaraen: If you put yourself in a position to be leeched from, others will leech from you. That's how the world works.

  • +1

    You can try but have no expectation on what about to happen next because nobody knows.

  • +2

    It doesn't really work like that. There is no need to go directly to the landlord.

    The agency doesn't 'pressure' the landlord to increase rent. They just say to landlord 'we think based on the market in the area the rent could be increased by $X, do you want us to go ahead with this', landlord says 'oh really, that would be nice, lets do it'

    If you say 'no' then the agency will go back to the landlord and say 'the tenant is not keen to pay the extra, what do you want us to do?', the landlord might say 'oh well never-mind it was worth a try', or they might say 'kick em out and lets get someone new'. (unlikely unless rent increase would be significant)

    • +9

      The agency doesn't 'pressure' the landlord to increase rent.

      Landlord here. My previous REA 100% were pressuring me hard to increase rent among other things, like authorising significantly expensive work without my knowledge from their 'tradie friends'.

      My new ones are much more ethical and cheaper.

      • -1

        They get a percentage of that expensive work…why else do you think they want it done ?

        Their whole business is based on getting a percentage, everything they recommend is so they get a percentage.

        • Some do and some don't. Getting a kickback is one thing but having someone cutting up the concrete and digging trenches without your knowledge is a whole different story. Then expecting you to pay for it all.

          • @Clear: Well it makes far more sense if you accept REA are not you friend, and they are just parasites who do things for money for THEM.

            Its the best answer to appreciate what they do and when they do it.

    • The agency doesn't 'pressure' the landlord to increase rent. They just say to landlord 'we think based on the market in the area the rent could be increased by $X, do you want us to go ahead with this', landlord says 'oh really, that would be nice, lets do it'

      See my post above.

      • That's not 'pressuring' lol

        You are paying them to manage your property.

        Them letting you know the current rent is below market rate is part of that.

        • Pressure: the use of persuasion or intimidation to make someone do something.

        • +1

          I know! I have to LOL at people saying their agent “pressures” them. The agent that is paid by them to do a job. Sounds like they are doing their job well if they are trying to extract the highest rent! It’s your call whether you try it on with the tenant, it’s the tenants choice whether to accept or push back then it’s your choice whether to let it go or kick them out!

    • Pretty much spot on.

  • -2

    Personally id try to evict you (or eventually find legal grounds to so) if you tried that with me
    Whole reason I hire a PM is to deal with the tenant and if they contact me directly.

    Gotta be kidding yourself if you think PMs are the problem and hungry for commission. They only make 5-12% depending on location. On that extra $50-$100 its only $5-10 a week. The owner gets the rest (with tax ato gets a decent chunk of it too - atleast less neg gearing for Syd/Melb property).

    Also since when was it greedy for tenants to charge market rent. Glad I don't have a rental property anymore

    • +2

      Personally id try to evict you

      Eh, my owner has turned up on my doorstep unannounced numerous times, now I could have told him to f**k off and return after giving me written notice but I didn't so a bit of give and take in my case at least. I can appreciate the sentiment though.

      Gotta be kidding yourself if you think PMs are the problem and hungry for commission

      As mentioned above $5 a week ends up being around $450/wk per PM which isn't a small amount for an agency especially when property sales are slowing.

      since when was it greedy for landlords to charge market rent

      It's not, my return offer will match the average increase in rents for my postcode over the time of my lease.

      • $450 per 90 weeks? but the owner would get nearly 10-20x that so its for the owner.

        What does price increase in your postcode have to do with anything? You need to match it with market rent for an equivalent property. If its higher than what it is then you might have a leg (it also could mean as a hint from the owner to get out)

        Maybe best to get out renting and look at buying a property. Lotta govt schemes now in help people get into their own houses

        • $450 per 90 weeks? but the owner would get nearly 10-20x that so its for the owner.

          Huh? An increase which equates to $5/week more for the agency ends up being ~$450/week per PM, plenty motivation for an agency to want to lean on owners to up rent.

          What does price increase in your postcode have to do with anything? You need to match it with market rent for an equivalent property.

          I'm taking the increase in average price for houses. I think that's fine enough.

          Maybe best to get out renting and look at buying a property.

          Nah I'm good. I can afford the increase but we operate in a little something called the free market and you'd be an idiot not to try and negotiate on a 20% increase.

          • @Cheaplikethebird: Love your last reply
            Yes its free market and you can try to offer whatever you like for the rental
            Also LL can charge whatever they like

            Until contracts are signed either party can accept/change/withdraw their offers

      • I bet you spit on the homeless for kicks too. Fancy admitting you would use illegal means to hunt out a reson to evict someone simply because thwey are desperate and want to try one more thing. I would love you to try that with me ;-)

        • +1

          (or eventually find legal grounds to so)

          I'm guessing you were boxed for mis-quoting someone and trying to start something?
          Yeah.

      • What were the LL doing turning up unannounced? If it is to do works or repairs that benefit you, it is your choice whether to allow him in or ask him to fxx off and wait for him to give notice, hence delaying the work.

    • +1

      This is why you don’t have a rental anymore as we don’t need more like you.

    • +4

      Personally id try to evict you

      Arms-reach landlord/tenancy is cancer. If you can't look someone in the eye once every 3 months, you're probably a scumbag.

      • +1

        If it wasnt arms reach Id be not using a PM

        Whole point im hiring a PM is to negotiate and handle a tenant for me

        Based on the OP glad im not a landlord anymore

        • +2

          Couldn't stand looking the people who you were ripping off in the eye, hey?

          • +1

            @Anbaraen: Ripping off <> providing them with SaaS (Shelter as a Service)

  • +7

    no the reason someone uses an agent is to not be hassled and have a level of separation and privacy

  • +1

    speaking of real estate agents…had to tell one to (profanity) off the other day after they cold called knocked, told them to leave, then they tried to leave some crap in our letter box while leaving…are they all (profanity) brain dead?

    • +3

      Yep, and their cousins are used/new car sales people.

    • +2

      are they all (profanity) brain dead?

      Possibly, although I subscribe more to the opinion that they're completely shameless when it comes to self promotion / prospecting.

      There's a real estate office over the back fence of the apartment complex I live in, they've had a life-sized cardboard cutout advertising one of their agents in one of the windows that faces our complex for months. Not sure what they think they're going to achieve with that aside from 1-star google reviews from everybody that lives here.

  • +9

    I am a landlord and have a fantastic relationship with my tenant.

    We will talk about :

    • Children (he is about to have his first any day).
    • Gardening tips, he loves and asks how to maintain the fruits that are in the garden. I gave him the freedom to rip them up and plant his own but he wanted to keep them.
    • Maintenance issues. I sort them out, the REA doesn't even know until an invoice is sent to them.
    • Requests for stuff, he wanted a dishwasher and I coordinated with him.

    So I would be comfortable to discuss the rent if approached. My preference would be to go through the REA but no issues at all.

    But if you are using the reddit article as a base, then you are making an assertion that the REA is always doing something wrong. Which is false. Most will not risk losing their licence for outright fraud.

    There is far more money to be made just operating within the law.

    • +1

      Exactly. As does my daughter and son in law. Why would you want to lose a good tenant?

      • +1

        Because you can find one that pays market rent? I have a decent relationship with mine but I still expect market rent at the end of the day

      • -1

        What defines a good tenant tho?

        Who’s to say the next tenant isn’t better?

        The reality is, an investment property, is exactly that. An investment.

        • +3

          What defines a good tenant tho?

          You can't be serious!

    • Thanks, I would say me and my owner have a similar relationship.

      Interested to know though… how would the scenario in the reddit thread be considered fraud?

    • +3

      Damn do it yourself and save the ongoing cost of the REA. I’ve been doing it for over 10 years and the only issue is having to go to court on the odd occasion. I also build a business relationship with tenants and they usually do right by me. Best thing I’ve ever done for my rentals.

  • +3

    Well as a private landlord for over 10 years I prefer it. If you did get hold of them I could even suggest they change all the paperwork to be direct with you and save the real estate costs. Then if you did leave for example they can setup a new agreement with a real estate company for the new tenant.

  • +3

    I would refer any personal contact straight to my REA. Not to do so is missing the point of paying an agent in the first place.

    A decent REA will recommend regular rental variations in line with the prevailing market.( Recall that a few years ago rents were going down in some locations).

  • +10

    Don't talk to me rentoid

  • +4

    I've never been 'pressured' to increase or decrease rent. The agent just says "these are the comparables in your area, I reckon you should stay at the same price or move to $X" or if the place sits empty for a while it's "maybe you should drop the price a little bit"

    I don't think they make enough off the commissions to really want to spend a lot of effort pushing one way or the other.

    If a tenant reached out to me direct (they don't have my details though) it wouldn't be a problem so long as they had been good tenants and were polite. But my agents seem to have been pretty decent people too.

    • I've heard mixed bag from agents, such as one agent will want to get max rental rate cause they are on commissioned based and there are other agents who are just relay information back and forth as a middle man from LL to tennant.

      In my case, my agent seems to be acting as a middle man and relaying information as my LL seems to be doing a good job meeting us halfway but also I do understand his position raising the rent by also 34% :(

    • I’ve got multiple investment properties across multiple states using multiple agents.

      Not once have I been “pressured” into increasing rents.

      Yearly rent reviews are common. It’s usually just a letter or email advising the market rate of my properties. On the same letter it usually gives me the option to increase as per their rental appraisal, or to remain as is, or enter a dollar amount I’d like the rent increased to.

      Personally, if an agent was to try pressure me, I’d be giving them the flick and finding another agent.

      Lastly, an agent doesn’t need the rent to increase for them to be able to increase the amount they charge a landlord.

  • Pretty sure there's a clause in the agency's contract that would prevent this from happening, if it were to happen then there'd be a cover for damages/lost income if they found out.

    • +2

      usually an authority is signed to get the place rented, 30/60 days etc. if during that period you rent it out yourself/through another agent, the agent you signed an authority with is entitled to a fee.

      however, later on, a landlord can leave an agent at any time - whether to self-manage or to another agent.

      In answer to OP; as a landlord I do not want the tenant reaching out to me.

  • +2

    the closer you are to your tenants the more they abuse you. it's best to be 'faceless' from personal experience. so no, i wouldn't want my tenant contacting me if i had a REA to do that.

    the REA is basically on side with the landlord and works for them. the tenant not so much.

    • -2

      the closer you are to your tenants the more they abuse you.

      As opposed to the distant and faceless kind of abuse that landlords inflict upon tenants?

      Lol, get the f**k outta here with your Marie Antoinette-esque "muh tenants are abusing me, help, help, I'm being oppressed" diatribe.

      It's a one-way, parasitic relationship.
      It's the reason countless revolutions have occurred throughout history. I don't recall a historical example of the reverse happening where the land-owning class conspired to overthrow their peasantry/serfs for being too oppressive, lol.

      What are they going to? Blackmail you by threatening to damage your house if you don't lower your rent and permanently screw themselves out of future housing by getting themselves blacklisted on every tenancy database? Most tenants don't even know their landlord's name nor do they have any means of directly contacting them.

      Lol and people wonder how chattel slavery and feudal monarchies were the norm up until the 1900s (even later in certain parts of the world) when we have so many petty, power-tripping tyrants and functional sociopaths still roaming our societies today who foam at the mouth when presented with the opportunity to exploit others for personal gain through the security of anonymity.

      • +6

        Who hurt you?

        • +4

          Was molested by a landlord, obs.

        • Lol, those boot-licking convict genes die hard don't they?

          Enjoy bending over and taking it from the feudal lords of today, amigo.

      • +1

        R U Ok?

    • That's because you're regularly stealing from them

      • How so ?

  • +3

    My agent wanted to increase rent by $20 a week. We said leave it alone. It seems high already and they are month to month.

    Funny enough I have my tenants details( they bought headphones from my store ) but I won’t be reaching them directly. I would probably feel uncomfortable dealing/negotiating without the REA present.

    • +1

      You make a good point in regards to not feeling comfortable negotiating directly.

    • -1

      Don't want to negotiate with the people you're stealing from face to face alone, probably a good shout

      • This is the western, democratic, capitalism utopia

        Are you expecting a different outcome?
        Landlords are just playing the game

  • +2

    Self manage. We do it. We have great tenants though.

    3 years it's been great

  • That reddit post is deffo fake, noone would accept a REA for taking 20% a month.

  • +1

    5% to 8% is going to the agent, so if they're willing to deal direct it will go straight in their pocket

  • +4

    There is a reason I pay for Agents. i.e. To avoid managing tenants. Defeats the purpose if tenants are bypassing the agent. Re rent increase, it is tough times. I have not raised my rent purely because I am on fixed interest and has not impacted me yet but cannot guarantee that if circumstances change. My agents have not forced the issue as well. I am not buying the Agent pushing for rent increase excuse. There are multiple factors involved.

  • +1

    I have a good relationship with my tenants, reason being that my previous agent was so absolutely useless. My tenant was worried about the condition of my property so he reached out to me directly to advise of the current issues and experiences, which gave me enough evidence to get rid of the previous property managers (even though they fought me and tried to drag it on forever and I had to threaten them with numerous letters and NCAT before they finally released it, after I discovered they hadn't been paying my council rates and water bills for almost a year).

    Without the tenant reaching out to me directly, I'd have never known of the issues and I'd have been worse off for it.

    Now I have a new agent who is much better and more proactive so I don't hear from the tenants any more. And the idea of a property manager is to keep the landlord and tenants at arms length from each other. That's how it should be - but sometimes you have to sidestep the agent if there's something obviously wrong as was the case with my situation.

    However - back to the original question. I wouldn't like it if the tenant reached out to me directly to negotiate rent. I pay a property manager 6% so I don't have to deal with that.

    The positive side is that I know my tenants are caring about my place, which is good, because it's their home after all. My agent has suggested a rent increase but I've pushed back, because my tenant going with his gut feel and contacting me directly may have indirectly helped to prevent further damage to my property. And that care factor is something that an extra $100 per week won't replace.

    • +2

      'that care factor is something that an extra $100 per week won't replace.'

      that's me as well - I have seen high-rent tenants trash the place, breaking things that cost a lot of grief, time and money to make good again, and resulting in police being called and threatening letters from body corporates, and vacancy periods

      my current tenants I self-manage keep the place beautifully clean, and to me that peace of mind is worth the difference

      it's also a warm feeling when one tenant told me he loves living there and wants to stay another year

  • +2

    'I have a good relationship with both the owner and the REA'

    as an owner I have a good relationship with my tenants that I self-manage directly, and have not increased rents for a while

    if you have experience working for a REA, then it's your call whether to ask the agent first - probably.

    start gentle and positive - as in 'I really like living here, and have kept the place very well, fixing small things at no cost to the owner, but if the rent goes up by $XXX then I'd probably have to move. As I understand the market, I'd be OK with $XX increase … ?'

    then see what the agent says - probably 'I'll check with the owner and get back to you'

    that's probably the majority opinion here including those who say they pay an agent to avoid dealing with tenants.

    I both self-manage and use an agent - both are OK, but it does irk me when I see 20% of gross rent going to an agent for commission and a bunch of over-priced 'repairs' that I would have done myself for way less.

  • +1

    I would not be happy about a tenant contacting me about a rent increase. If they called me and I took the call, I'd probably not be ready for the convo. I'd probably tell them nicely that I'll get back to them. Then I'll tell the agent "wtf happened there, tell them no".

    Every rent increase is carefully considered before being put to the tenant. Agent and I look through comparables, assess tenant qualities (e.g. I have a handy tenant that fixes small things, I consider the value he saves me and I pass that value onto him entirely, it's his value. On the other hand, I have another tenant that's a dumbf and has asked for callouts for dumb things, I pass that negative value onto him too). I also subtract a small margin for the hassle of losing a tenant so it's always slightly under market. Basically I put myself in their shoes and try to work out what it takes for them to stay. I put it to them and it's a 'take it or leave it' proposition.

    • Got them over a barrel because you're exploiting their human right to a safe place to live, so take it or leave it is an apt characterisation

      • Is this the situation you find yourself in ?

      • haha bank's got a barrel over my head, what's your point? we live in a society

        • Did they force you to buy an investment property? Else, I don't quite understand how it's comparable to someone not wanting to be homeless - our social housing system is completely inadequate.

  • +2

    I am a landlord with multiple rentals

    I engage a property manager so I don't have to talk to tenants. I also pay them so they work in my interest. Once you start talking to tenants about one thing, it becomes an endless string of requests - sorry I don't have time for that.

    Market rent is market rent. I never ask for more than market rent but I would rarely accept less - especially if my property is high in demand and vacancy rates are low.

    Please note that for some of my tenants I have purposely not increased their rents to maximum market rate because they have looked after the house, pay rent on time, and I never hear from them. With that said, if the difference between what they are paying vs market rent is like $100pw or more, then a fair compromise would be a 70% increase rather than full whack

    • $100/week on a $2000/week house is nothing. On a $200/week apartment it's a lot.
      Hard to generalise.

      • Where are said apartments that are only $200 a week?

        • Shared one's.

      • $100 a week is something irrespective of what you pay

    • -1

      The tenants that you never hear from are good tenants.

      Times are tight so I've been doing some repairs myself recently. I look them in the eye as I'm fixing whatever stupid sht they called me out for, as if to say "look what you made me do. You couldn't do this? You don't have a screw driver and 5 minutes?". I hope they get the message.

  • +1

    I'm surprised you have the owners contact details. I feel like a proper property manager would have dealt with you directly in every step of the process so you've never had direct contact with the owners

  • If their a good tenant you should already be looking after them. You pay a agent for a reason whats the point of the agent if tenant is contacting you.

  • -1

    I have the opposite problem as a landlord.
    Agency wants to keep rent the same and not have the hassle and work of finding another tenant for a small increase in commission.
    I had to push the agency to increase and was too moderate in my increase.

  • +3

    I am a landlord and have always treated my tenants well, but honestly I wouldn't want to deal with them directly. That's the whole point of having an agent.

  • +1

    As a former landlord of a couple of properties (and I lost money btw as rent nowhere near came close to costs - Melb 2004-2015) no one cares more about the property than me.
    So though REA would initially lease property after some time with good tenants I would self manage.
    The tenants knew ANY issue to contact me and would be remedied immediately .
    Good tenants are worth their weight in gold .

    I would say reach out to landlord directly.
    You’ve nothing to lose - paying on time and keeping property to high standard… having direct relationship was extremely good for me.

    My REA was fabulous. I followed her when she moved and e eventually set up her own business and she got the sale when sold . She knew my financial situation and there was never an issue I self managed after evidence of good tenants, and she would relet .

    When we did have a tenant who clearly would makes excuses when late payments…I didn’t self manage and that situation we did have to go v at to claim on bond due damage and also on the landlord insurance.

    You ONLY hear about the crappy landlords.
    I made sure the property was immaculate when tenants moved in and was an excellent landlord.
    Sadly good landlords get SCREWED.
    No rights NSW pretty much.
    Hundreds of tenant agencies for advice, not a single one for landlords….
    Even when tenant owes money and leaves personal property at abandoned physical property- they get to be able to get it back….

    I know rents are high these times and it’s tough but for a decade the rent return on properties in Melbourne against costs…9% mortgage rates, . Tenants had it great.

    Just my thoughts re my experience.
    Let us know what you do and how it goes.

    • -3

      Tenants have never "had it great". Tenants are unable to afford a house of their own because rich assholes buy and let thirty properties, rather than owning one house and letting other people purchase homes. Get your head out of your ass.

      • +2

        Plenty of homes to purchase. Have you tried realestate.com or somain.com?

        What's the issue?

        • What's the issue?

          lol

      • +1

        There's an oversupply of housing at the moment, with land sitting on the market for an average of over a month before receiving offers or clearing.

        If you can't find something that's affordable, it's because your burying your head in the sand and aren't willing to look in areas that are actually affordable for your budget.

        Crying your way into old age while parroting extremist talking points on the internet is no way to live at all.

  • I'd be happy for them to contact me, if they felt an issue was not being resolved by the agent in a quick/efficient manner (or to their satisfaction).

  • +1

    No I would not want the tenant to contact me in any circumstance. There are legal avenues and letters you can serve if you think you are not being treated fairly by the agent.

    With respect to rent increases, everyone is getting them and it’s the market. I voted in ‘19 against my own economic interests to remove negative gearing so don’t blame me…get on the streets and start protesting. Death taxes on Boomers would be a start.

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