Tenant asking for a reduction mid lease

D

DeBarr

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Hi all

I'm renting out an apartment at the moment and the lease is due for renewal in 6 months - we negotiated a drop at the last renewal (April) to reflect the market value at that time. The tenant just rang and asked for a further 20% discount on the rent as there is a similar property in the estate for rent at that level.

I would be keen to hang on to the tenants as they have been reliable and I'm mindful of the trends in rent levels. At the same time while I want to be fair to them I don't want to be taken as a soft touch either.

Any advice?
 
If it still covers your costs - mort & ins etc. why not offer a 10% reduction? If they are good reliable tenants maybe it's worth it - but check out what they are saying just in case. Be interesting to know how you got on.
 
Check the other property out! Does it exist? Is it in good shape?

I had a discussion with my tenants about this at lease renewal time. They provided a link to a house on DAFT that had one bedroom less than mine and was very dated and generally shoddy. I refused to reduce to what the asked (based on a dump comparison) but looked around and reckoned I was about 10% over the market rate for comparable properties. I reduced by 10% to keep it in line with these and they happily accepted and signed a new lease.

Asking for reductions mid lease is a bit cheeky I feel. But you have to decide if you really are charging 20% over the market rate. If so, it's a lot, particularly if you have good tenants.
 
Bent over backwards for my tenants a few months ago - felt sorry for them and offered to reduce rent to 750 (from 850). I had no obligation to do so as mid-lease. The cheeky beggar said I should reduce to 700! I gave him the reduction to 750, and the guy moved out at end of lease - I'm sorry I was so accommodating
 
Thanks for the responses folks.

We always used to remain slightly under market value to keep a happy relationship and both sides felt they were doing ok. The market appears to have a sudden drop recently. The 20% reduction is based on an entry on Daft but there are 3 conflicting entries for the same property ranging 20% below to what we charging and 10% higher.

We rang the number and then they it was now at the lower amount.....

Yeah I'm a bit miffed that they are asking mid-lease as we only have a right to review once a year.

At the same time I want to be fair about it.....
 
Make sure the DAFT house is legit. It has happened before that tenants have paid 20 quid for a false ad on DAFT (with pictures of a friends rented house and all) to point their landlord to ;-) Friend can even pretend to be the 'landlord' of the other property. Look around yourself and see what you feel the house is worth compared to the rest, then drop it a little bit if that's what you feel comfortable with.
 
I'm open to correction on this if any part of what I say is illegal, but could both you and the tenant agree to end the current lease early and then enter a new, 1 year lease at the lower rate? That way they get the lower rate, but you know that you'll at least get another year out of it. And maybe make it clear to them that there will be no further reviews until the new lease expires.
 
I would agree to a 10% reduction in your rent with the tenants. Personally I think keeping good tenants is important. If they moved on and you had to re-advertise and get new tenants I think that would cost you more than the 10% reduction.
 
The risk with all of this rent reduction is that it comes back to bite landlords eventually. Just because one house on an estate is on the market to rent at a lower price does that mean that every house on the estate then has to drop prices mid-lease to reflect that one house? Landlords cannot break a lease to increase rents mid-lease just because one house is on the market for rent at a higher rate.

If the landlord can still cover their costs that is one thing. When interest rates start to rise and when the landlord can only write off 75% of mortgage interest against tax next year then it is going to become difficult.

I'm ceratinly not ripping off my tenants, have always charged slightly below market value and looked after the property well. However I do not want to find myself paying to house people in my property.

I know there are arguments for both sides, but the OP already reduced the rent 6 months ago. I would say the tenant is being cheeky. I would certainly ask for a new one year lease to be signed if I was going to reduce the rent again. However the tenant has already shown that he doesn't hold much stock in signing a lease contract anyway.
 
Yeah I'm not sure if they hold a lease in any regard tbh. What makes me think that is the fact there's 6 months left to go and they are on Daft checking the local rental prices....

I could understand if they were coming up to renewal time - absolutley no problem there.... my gut is to drop 10% and if they chose to move on then so be it....

They are in the apartment 18 months - at first renewal they discused a drop which we agreed to and now it's happening mid-lease....

Any other opinions?
 
Recently let a house in a very popular area. It was in excellent condition, but due to current trends, we marketed it 15% lowever than the previous tenants were paying. It was let within 2 weeks. However, a couple of days later, we noticed an add on daft for a similar property. It was advertised 20% lower than our property. I rang the advertiser (an agent), explained our experience, but he was not interested.
If he had checked out the market properly, he would have served his client better.
Instead he has undermined the other landlords and greated disgruntled tenants.
 
valery said:
Recently let a house in a very popular area. It was in excellent condition, but due to current trends, we marketed it 15% lowever than the previous tenants were paying. It was let within 2 weeks. However, a couple of days later, we noticed an add on daft for a similar property. It was advertised 20% lower than our property. I rang the advertiser (an agent), explained our experience, but he was not interested.
If he had checked out the market properly, he would have served his client better.
Instead he has undermined the other landlords and greated disgruntled tenants.
Click to expand...
It would probably be illegal for you and the other landlord to collude in setting prices - against competitions legislation.

Bet his tenants aren't disgruntled.
 
I don't see why they signed a lease if they are there 18 months. After the first lease they would have had part 4 tenancy and would have been in a stronger position to negotiate.
 
valery said:
Recently let a house in a very popular area. It was in excellent condition, but due to current trends, we marketed it 15% lowever than the previous tenants were paying. It was let within 2 weeks. However, a couple of days later, we noticed an add on daft for a similar property. It was advertised 20% lower than our property. I rang the advertiser (an agent), explained our experience, but he was not interested.
If he had checked out the market properly, he would have served his client better.
Instead he has undermined the other landlords and greated disgruntled tenants.
Click to expand...
Unbelieveable. And people wonder why landlords have a bad rep.
 
valery said:
Recently let a house in a very popular area. It was in excellent condition, but due to current trends, we marketed it 15% lowever than the previous tenants were paying. It was let within 2 weeks. However, a couple of days later, we noticed an add on daft for a similar property. It was advertised 20% lower than our property. I rang the advertiser (an agent), explained our experience, but he was not interested.
If he had checked out the market properly, he would have served his client better.
Instead he has undermined the other landlords and greated disgruntled tenants.
Click to expand...


That letting agent didn't undercut as you had a tenant but come renewal time, your tenant will know rents have dropped even further

So you called the letting agent to increase their prices. Why?
Maybe the letting agent was under instructions to let the property as soon as possible. After all, the landlord probably has a mortgage to pay and can't afford your two weeks of a vacant period.
Say your house is €800 per month and of course I'm guessing, that's €1600 gone and lost. So a two week turnaround can be improved on

You undercut the landlords in your area and then someone did the exact same thing
Come renewal time, the tenant will be very happy with all the competition :)
 
My family moved abroad last year and rented our property through an agent and registered with the PRTB we also spent approx 7.000 euro doing up house (new kitchen etc),We had new tenants in on a 1 year lease agent insisted they would be perfect references all in order etc ,4 months into lease they insisted we drop rent by 300 euro PM we eventually agreed on 200 euro 2 months later they moved out even though house rental was in line with similer property's in the area,i suppose there is not much landlords can do until the PRTB and agents adopt a stronger and proactive approach to this business. Here in Australia rent is calculated by the week and the bond is 4 weeks rent in advance(held by tribunal) plus 2 weeks goes to the landlord(6 weeks in advance), and if a tenant breaks the lease it is entirely up to the tenant to find a replacement tenant with the landlords approval and cover all advertising fees or loss of rent to the landlord,there is also a very efficient tribunal system here which will quickly deal with any issues between landlord/tenants,Good luck with your situation maybe the PRTB and agents needs to adopt this type of system which ensures a good and fair sevice to both tenants and landlords and certainly helps remove the bad landlord/tenant stigma.
 
DeBarr said:
I would be keen to hang on to the tenants as they have been reliable and I'm mindful of the trends in rent levels.
Click to expand...

Keep your tenants and negotiate on the reduction. Rents are coming down but also a lot of tenants have been hit by wage reductions. That is my experience.
 
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