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Property Managers Distorting True Market Rent

2AK 16 January 2013 21

As a property investor for more than 20 years, I have a few rentals in Canberra. I want to highlight a practice that is rampant here in Canberra by Real estate agent/property managers whereby the true value of market rent is always undervalued by $30 to $40 per week on a typical 2 to 3 bedroom rental property.

This is to ensure that they get a cast of thousands at the door at inspection time. Then they go through the applications with a fine tooth comb looking for executives or professional with high income.

This is because these types of tenants usually require less management, fewer hassles and more time for them to take on additional properties to manage to earn more money for minimum work.

In the meantime 90% – 95% of the people who attended the inspection will have wasted their time unknowingly because their application will inevitably be rejected.

I am annoyed that the interest of the property owners are not represented because they are losing significant money each week in addition to the 7% to 10% (of weekly rental income) for management fees owners are required to pay each week.

This is why all my properties are managed by myself and all of my rentals are $30 more than Real Estate managed properties. As an example, I have a 2 br property in Lyneham (60 Wattle St Lyneham) with weekly rental of $360 for the last two years and currently a Real Estate agent is listing pretty much the same property for $330 per week. I feel sorry for the owners.

Advice, if you have the time rent your property your self privately or asks your property manager why is rental price less than privately listed rental?

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21 Responses to Property Managers Distorting True Market Rent
MightyJoe 1:52 pm 26 Feb 13

i’m in a crappy position at the moment in that I need a short term rental….
but problem is short term to most realtors is 6mths+ and not the 2.5-3 mths I need for my new place to be built..

Also, i’ve never rented. period.So can’t wait for the applications I hand in, funny thing is i’m on $100k + but know that i will still find it hard to rent a place.

I feel for the people who can’t rent as low income / single income etc, but to the OP – mate, I hope I never ever have to rent from you.. you sound like a dream lessor…. yeah a nightmare.

Property Manager said :

My my my, what a storm in a teacup.

2AK is such a penny pincher that they’re proud of saving 8% in agent fees, AND charging tenants $30pw over market rent. Hallelujah though, 2AK will accept any tenant – particularly those struggling to rent in a competitive market. In fact, 2AK prefers them… probably because when they have no other options they’re willing to pay the premium price being asked for that shitbox unit in Cotter Court.

That’s the kind of landlord I would want to rent from!!!

Champion, all you’ve proven is that, while property managers are imperfect, there are many of us who are stuck representing greedy schmucks who have all the compassion and humanity of an electric eel. As agents we represent a range of personalities that reflects the different people within our society in general. As with any group representative of the population, there are some genuinely wonderful people we represent; but there’s also people like 2AK.

The market has ‘softened’ considerably over the last two years, and an oversupply of apartment stock has seen prices come back from the lofty highs owners enjoyed in 2010. As pointed out by some of the smarter contributors here, if an owner sets the price low to attract the greatest possible market interest in their property, they will have the best chance of securing the best possible tenant, at the best possible price. That ain’t rocket science.

For those struggling to secure a rental property, I genuinely feel for you. It is a horrid position to be put it – you have no history, so no one is willing to take a chance on you, so you can’t get a history – rinse and repeat.

I offered some general tips for securing a rental some time ago at

Beyond that, the advice to have a parent or someone co-apply with you is a great idea*. It provides the property owner with greater security, while allowing you to build your own rental history. Just don’t screw it up or you’ll have a negative rental history and will quickly run out of people willing to co-apply with you.

Hopefully the slowing of the rental market, particularly in the apartment/unit sector will see previously greedy lessors left with no option but to take a punt on respectable, mature and friendly people without a rental history.

*I know its not fair that you should have to co-apply with a parent. It’s not fair that the owner can’t just take you at your word and disregard the applications from tenants with good rental histories just to give you a go. It’s also not fair that you can’t see a doctor without a 4 hour wait and an eventual misdiagnosis. It’s not fair that many mothers have to spend more on daycare than they can make at work. It’s not fair that One Direction is… alive 😉 Unfortunately though we can’t control the things that we might think are unfair, all we can control is ourselves within the circumstances inflicted upon us.

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