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How long does it take to Rent out an apartment? (Roughly)

Discussion in 'Real Estate' started by Sk3tChY, 15th Feb, 2009.

  1. Sk3tChY

    Sk3tChY Well-Known Member

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    I know this is a very circumstancial question, but I'm just looking for a rough estimate on how long it would take to rent out an apartment.

    This is the apartment;

    http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2006946152

    Since then it has been re-painted and is lookin much cleaner. Apart from that the railings on the block have all been replaced and the place looks a bit nicer now.

    I'd be looking for what I'd consider not necessarily 'cheap' rent, but reasonable.. $275pw.. Which looks to be reasonable for what it is, and the location.

    1. Any ideas on roughly how long it would take to start getting rent for the place?
    2. Going through an agent would probably be the quickest option?

    Basically my situation is, that I'm considering renting out a place in the City, and using the rent from my own place to cover the rent of the new place. Living in the City would just be so much more convenient for me.
     
  2. Billv

    Billv Getting there

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    I don't know the vacancies in the area but considering the shortgage around I'll say a week.

    However, advertising and screening out the applicants could be a bit too much. I think you should let a professional to do this..

    Managing a property youself saves a few $ but can give you serious headaches and particularly if you don't have the time and don't know the rules & regulations.

    cheers
     
  3. Sk3tChY

    Sk3tChY Well-Known Member

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    Dang.. How hard is it to have a place rented out within a week..? (provided of course the supply/demand and asking rent was all reasonable)

    Is there any sort of grace period or something you need to give the tennants..? I'd really like to be able to find an appropriate tennant and basically have them paying me rent and what not within the next day or two..?

    Ideally I'd like to have a paying tennant within 14 days.. Is that a little far fetched?

    I'm basically thinking it'll take about 1 day to go into the real estate agent and get everything organised and ready to be advertised.. Leave it for a week or so to be advertised and what not (Maybe 10 days) then have the inspection and find an appropriate tennant, who would be willing to sign a contract and begin paying rent within the next couple days.

    Possible?
     
  4. JustB

    JustB Well-Known Member

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    I've no real knowledge on the rental vacancies in the area of the unit you linked to. However, my personal experience with 2 apartments on Sydney's lower north shore has been a 1 day turn-around of tenants over the past 3.5 years. That is, not a single vacant day in this period. Both properties are managed by an agent, and when leases were expiring, advertisements went out 1 week before vacating, and an open house was arranged.

    That being said, for the 3 years prior, it was taking up to 3-4 weeks to get new tenants in place. So all depends on the rental supply and demand in the area at the time.

    But yes, it is certainly possible to get a tenant in place within 14 days of signing up with a property manager.
     
  5. Billv

    Billv Getting there

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    Sk3tChY

    In recent times I had 1 tenant moving out and another moving in the next day. I didn't even have time to do a proper cleaning.

    The earlier the agent adds it to his list the quicker it will lease.
    Go and see 1 tomorrow (from the area) and sign an agreement

    Even if your place is not 100% ready, they can come and see it and it doesn't matter if the painting is not finished yet, tenants like the smell of fresh paint.

    Don't let the time pass.
    You're losing rent every day.......:eek:
     
  6. Sk3tChY

    Sk3tChY Well-Known Member

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    Wow thanks guys, I didn't know you could get a new tennant so quickly.

    I'm not losing anything at the moment right now BV as I'm currently living in the place. My whole 'idea' is to rent out another place, closer to the city, and to then rent out my own place to cover the rent of the new place, so essentially It's not costing me anymore, I just have the benefit of a place in the heart of the City, which would make things soooo much more convenient for me and my lifestyle.

    I've currently found 2 places I like that are $250pw and $300pw, I'm not sure which one I'm going to go for, but as I said I'm hoping to get $275pw at least for my place, and think I shouldn't have much trouble getting up to $300pw.

    How much (roughly) is agent fees..? I've heard its approx 10% of the rental yield, is this roughly the going rate..?

    Personally I'm considering the cheaper $250pw apartment, because then it won't cost me any more at all, and will give me some leeway, it's just the $300pw place is sooo damn nice.. heh
     
  7. JustB

    JustB Well-Known Member

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    Standard agent fees are usually 7-8% (ex GST), plus basic admin, plus 2wks rent on each new letting. This is negotiable, depending on the agent, the expected rent, and the number of properties they are managing for you.

    I personally try and get the #wks rent on letting as low as possible (1/2wk, or 1wk max), and not negotiate so hard on the percentage fee. This increases the incentive for the agent to find good, long term tenants, paying market rent or above. I don't want an agent to make all their profit by re-letting the property to new tenants every 6 months :)
     
  8. Sk3tChY

    Sk3tChY Well-Known Member

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    Sorry could you elaborate a little, I'm new to this..

    So there's;

    Standard Fees - Which is a % of the weekly rent.
    Basic Admin Fees - What are these?
    New Letting Fee - I'm assuming that everytime the agent finds a new tennant they charge you this, which as you mentioned is usually 2wks rent?
     
  9. dudek

    dudek Well-Known Member

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    Sk3tChY I strongly recommend book to start with:

    "More Wealth from Residential Property" by Jan Somers.

    easy riding and few good tips.
     
  10. JustB

    JustB Well-Known Member

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    Sk3tChY,

    The standard fee is the percentage of rent charged as commission by the property manager.

    The admin fee covers the agents costs for processing payments on your behalf e.g. strata levies, council rates, water rates etc. My manager charges $5/month, + $1/bill payed. So typically, my admin fee is between $5 and $7 a month.

    The letting fee is charged every time a new lease is signed by a tenant, and is typically 2 weeks rent.

    Note that all these figures are exclusive of GST. So a 7% standard commission costs you 7.7%, a $5 admin fee costs you $5.50, and a 2 week letting fee costs you 2.2 weeks rent. But also note, that all these costs are tax deductible, and well worth the saved headaches of managing a property yourself (IMHO).
     
  11. Billv

    Billv Getting there

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  12. Sk3tChY

    Sk3tChY Well-Known Member

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    Thank you Dudek, BV and JustB.

    I'll definitely have a read over those guides.

    JustB I have one last query in regards to those fees;

    You would recommend that I try get the Letting Fee thing dropped down to 1 week rent rather than 2 so the agent is more likely to find good long term tennants..?

    Is this something that is hard to do..?
     
  13. Billv

    Billv Getting there

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    I've always paid 1 weeks rent for various IP's with different agents and in different parts of Syd. so 1 week is the norm and the management fee varies as well starting at 6%.

    If the RE agent you've bought the place from is in the area and you are happy with them ask them what their management fee is and mention that you've bought the place through them.

    They'll probably give you a better rate.
     
  14. Sk3tChY

    Sk3tChY Well-Known Member

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    Ahhh ic.. Well I never had a problem with the agent I bought the property off, so I wouldn't have a clue whether I'd say I was 'happy' with him or not.

    I was going to ask, what/who/how would I get the cheapest rate, are there any stand out RE companies that provide reasonable prices..?

    (I can understand that asking for quality would be too circumstancial as it would vary from Agent to Agent, but im sure the prices would probably be roughly the same from RE to RE..?)
     
  15. Billv

    Billv Getting there

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    Yes, so don't analyse it too much, get on with it...:D
     
  16. Sk3tChY

    Sk3tChY Well-Known Member

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    Hehe.. Yer.. Well the places in the City I was looking at fell through, so I'm in no rush at the moment, I'll probably drop into a RE on my day off on Friday. I'm assuming it would be best to use a RE that's closest to the apartment?

    A little off topic, one of the apartments I was interested in actually turned out to be one of them international scammers, they're everywhere now. I got an email from a yahoo account from someone with hopeless broken english, basically saying they were overseas rah rah.. I figured they place was a little to good to be true.
     
  17. dudek

    dudek Well-Known Member

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    Sk3tChY,
    I am not sure what to say but I always start with what I know. I look around my suburb then my horizons expend further :D
    I hang my eye on this one lately:

    2/1160 PACIFIC HIGHWAY PYMBLE
     
  18. Jacque

    Jacque Team InvestEd

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    Hi Dudek

    So what have you been told it rents for?
     
  19. Jacque

    Jacque Team InvestEd

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    Well you've heard the saying "If it sounds too good to be true..."
    Caveat Emptor applies with anything in life, and especially investments.
     
  20. dudek

    dudek Well-Known Member

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    I didn’t contact agent as I can’t afford to borrow more money ATM. There is only very few similar properties for rent and it varies from $500 to $600 p/w Walking distance from train station and shops.