Good Tenants - what's it worth to keep them???

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geri

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I have been renting out a house for the past year in Clondalkin Villlage. We have had the same tenants for the year. They are model tenants - no complaints from neighbours, rent always paid on time, house is kept in great condition. The monthly rent for the year was E12OO. The contract is now up for renewal, and they have asked us to drop the rent to E1100. They have told me they looked at at similar properties in the area and there are some available for 1100. They don't want to leave, but will if we don't drop the rent. If we do drop it to 1100 they will sign up again for another year. What are your opinions on the value of good tenants versus the extra 100 per month. Its one months rent over the year. I'm leaning towards dropping the rent for the peace of mind and a full years rental.
 
You could offer to split the difference, say €1150, that way you're seen to be flexible without being a walkover. If the rent starts dropping after year one it will make it very difficult for you to raise it in the future. If they don't go for it you've got to figure on paying advertising, screening new tenants and perhaps idle months waiting for the "right" tenant to come along. Be tentative and suss them out!
 
Hi Carpenter,

Yep, I have already done that, but they are adamant they want to drop to 1100. As far as they're concerned thats a utility bill paid for the month. They are mimimum wage workers, so I imagine its worth it to them. This all came up three weeks ago. I have been away until now, so I gave them three weeks to consider the 1150, and they probably viewed other places aswell. They aren't going to change their minds on it.
Thanks
Geri.
 
Well I supppose you could accept their point but stipulate that this is a one off and state that the rent WILL go up next year, your maintenance costs etc are not going down.
 
Here, check out daft for rent charges in your area to see what is available to them. The seem to be telling the truth - there are a few 3 beds @ €1100. So it's gonna depend on how well furnished your place is in comparison to the other places that they'll look at or it's closer to bus routes and stuff.

Just to let you know though .. it came up with 14 3 bed properties available in Clondalkin which have been posted in the last 7 days!

http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=202&s[mnp]=&s[mxp]=&s[bd_no]=3&s[sort_by]=date&s[sort_type]=d&offset=10&limit=10&search_type=rental&offset=0
 
I'm also a landlord Geri and if I were you, I woud drop it to E1,100 - if you don't and they move out then it's as Carpenter pointed out -

idle months waiting for the "right" tenant to come along
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Plus possible cleaning, painting, gardening costs etc.

Good tenants like yours are hard to find - I'd hang on to them and tell them that while you appreciate their good tenancy, it will have to go up next year to cover your costs.
 
Speaking as someone who rents myself, I'll pay the market rate and no more even if the landlord tells me "This year is an exception, I will be raising the rent next year because of my costs". Next year is a whole new ballgame - I'm not in the business of making friends with my landlord, I simply expect a professional service from him while I uphold my side of the agreement. I don't know many landlords out there who didn't increase rents when it was a strong rental market, now that the market has turned (at least from my viewpoint) landlords will have to start accepting lower rents. Simple supply and demand.

On the question itself, from personal experience of filling rooms in a house (can't quote any statistics), it has become an awful lot harder to fill rentals. A couple of years ago, the phone would never stop ringing when you put an ad in daft or the herald, this year (and last year) you would get 2 or 3 people around in a week, and you'd have to accept people you previously wouldn't have considered. If I was a landlord, I would want to hang on to "good" tenants (once they agree a reasonable rent), particularly with a view to the medium term direction of the market.
 
keep the good tenants for as long as you can , 1200 is a lot less than you will spend in painting etc one months lost rent is lost forever you wont get it back
 
Hi to all who replied,

Thank you all for your posts. Its made me feel confident that I'm doing the right thing by dropping the rent. However, anyone else viewing this thread, I would still be interested in your opinions.
Thanks
Geri
 
Speaking as a landlord who has had some bad and expensive experiences with poor tenants, I would certainly keep good tenants as long as I could.
 
delgirl said:
Good tenants like yours are hard to find - I'd hang on to them and tell them that while you appreciate their good tenancy, it will have to go up next year to cover your costs.
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I'd have to voice agreement with this sentiment.

It's hard to put a value on the hassle factor but I'd always be happy to look after a good tenant to avoid the unknown.
 
Am also a landlord. You're dropping the rent by E100 per month x 12 months = E1200. Try them on keeping the rent at 1200 per month but giving them the 12th month free. Still amounts to E13200 for the year. That way they'll definitely stay for the year. Otherwise there's nothing to stop them changing their mind and moving out after 6 months for example.
 
Good idea MPH, except that I have already now agreed the 1100 p/m with them. Ah well, will keep it in mind for future.
 
giving them the 12th month free
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Also think that was a good idea MPH.

Another idea, which I've just offered to a good tenant, is to pay for refuse disposal and grass cutting for the year - it takes the hassle away from the tenant, ensures that garbage is being disposed of properly and keeps the property tidy - and it can be offset as a rental expense provided you get receipts.
 
Another thing I do is tell tenants when they are signing the lease that if they do not stay for the year they will forfeit their deposit which is a months rent. Has been effective so far! Just thought I would add it in.
 
Again, thanks to all for the sound advice. I have prepared a new contract stating that the rent is 1100 p/m, with a clause stating that after 12 months the rent will again go back up to 1200. Is this acceptable from a PRTB point of view does anyone know? I've looked at it on line and it says that the Landlord has the right to review the rent annually, and must give 28 days notice of an increase. I presume this means at least 28 days?? By the way, wouldn't you think the PRTB would send you details of yours and the tenants obligations after you register? What is the 70 Euro actully used for???
 
I also have a 3 bed house in Clondalkin rented out. In april 2004 with rent was 1200 and in april 2005 it was reduced to 1100 which reflects the average rent in the area. They have obviously been looking at daft and know what the average rents are. The estate agent who looks after it said he has more houses at the moment than tenants.
 
I am not sure it would be a very good idea inserting the clause which stipulates that the rent will go back up to €1200 at the end of the year. It could end up frightening them away and they could just walk and leave you high and dry with no tenants and you will still be only probably able to command a rent of €1100 from any new tenants. Is there much development due to come on stream in the next 12 months in the area?
 
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