Every now and then an early evening TV show will run a “bad tenant” or “nasty landlord” story and everyone can be shocked and horrified about the extremes of the rental marketplace. Occasionally it might even dissuade some investors from buying property. In ‘real life’, especially in Brisbane’s inner-city, things are far more boring and we rarely see or hear of trashed houses or cut-throat investors.
So last week’s yarn on “A Current Affair” about real estate agents allegedly engaging in the illegal practice of rent bidding, was similarly sensationalist and a fair way from the daily life of a property manager. Here’s a quick reminder on Queensland’s laws and the obligations of landlords and agents:
Back in 2009 the then state government responded to concerns from tenancy advocates to require agents and landlords to advertise rental homes with a fixed rental amount. The busy market of the time had seen tenants asked to submit their ‘best offer’ and the government felt this competitive pressure was unfair. Landlords should work out what rent they want and not solicit offers, they said. They went further to mandate a minimum period of 6 months before any tenant could be asked to pay a higher rent.
So in a ‘hidden camera sting’ the journos last week posed as prospective tenants to ask agents if they could submit a rental application at a higher rent. From what we saw the agents depicted in the expose handled the questions from the undercover reporter correctly and did not encourage the tenants into a “bidding war”. When asked could they put a higher price on their application the agents simply said yes. If a tenant offers more rent who are we to stop them? As an agent working for our client – the landlord – we want to achieve a premium rent and secure quality tenants.
Yes, we have a duty to act fairly to all involved and soliciting for a higher rent is prohibited. But this is, so far at least, a free market. Realistically unless the rental market is particularly buoyant or a property is under-priced it’s actually unusual for tenants to offer over the asking price. My experience after 8 years in the industry is that often times the tenants who are offering to pay more are compensating for a poor rental history. Landlords and their agents would be wise to pay more attention to these applicants to ensure they’re not being deceived and swayed by an extra $5 per week.
Many tenants no doubt feel the laws offer them some safeguard, and no doubt some landlords may like to wind back the laws to free up competitive rental pressures. Our advice to landlords is to use a property manager who knows the market, can set that fixed asking rent at the highest possible level but, importantly, ensure you attract the best possible applicants for your investment.
It might not be newsworthy, but it’s a sound strategy for property investors to adopt.
We’d love to hear your thoughts in the comments below. Bees Nees City Realty is an inner-Brisbane specialist agency and we’d love to work for you on the management of your investment property. Please call us on 07 3214 6888 or email firstname.lastname@example.org