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6 Month lease - Can any property managers help?


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#1 Lime-Polka-Dot

Posted 17 May 2020 - 03:23 PM

I've been offered a lease on a lovely, very affordable place in my dream location. The property manager didn't mention it was only a 6 month lease to be extended after this time if obligations are met (paying rent on time and keeping the property in good condition) Until I recieved a copy of the lease.

I am a little concerned about the rent being increased after the 6 month lease and asked the property manager if this is likely. The response was that no discussion around this has been had with the landlord and 6 months is the new standard due to covid 19.

Is this normal for other agencies at the moment? Should I be concerned about a significant rent increase in 6 months? I'm in Victoria.

#2 No Drama Please

Posted 17 May 2020 - 03:50 PM

I’m not a property manager but I have moved into a place with a six month lease which didn’t get renewed because they just brought it and were wanting someone in to pay the mortgage till their own lease expired (didn’t mention it when we signed the lease) and have now seen a lot of six month leases now on ex Airbnb properties that are now on the market where they are going to see how the market goes before they decide if they can charge more or not.

If you’ve already moved I’d probably not get that comfortable and look around for something on a longer lease while you are in the current property or if you haven’t moved yet I’d try and negotiate a longer lease or just keep looking (that’s just my experience from having to more then move again six months later though, the less packing/unpacking/moving/looking the better).

#3 born.a.girl

Posted 17 May 2020 - 03:59 PM

I'd be wondering about airbnb being rented out for six months, too.

#4 Lime-Polka-Dot

Posted 17 May 2020 - 04:10 PM

Definitely not an ex air bnb. It's a brand new townhouse in Melbourne northern suburbs, there is a substantial amount of them in the same street now available for lease / sale through various agents.

This particular agent has multiple, whether it is a builder investor situation or through various landlords I'm unsure.

I am slightly more at ease knowing that it is priced in the same range as others throughout different parts of the suburb (there is a lot of building still happening in the area) and isn't a  "too good to be true" price not in line with the rest of the current market.

I suppose it is a matter of understanding there is a chance the lease may not be extended or there may be an increase at the end of the 6 months. It does seem to be a high likelihood of remaining a long term rental property however.

#5 PrincessPeach

Posted 17 May 2020 - 04:52 PM

We took our tennants in on a 6 month initial lease & then went yearly.

I can't answer about the rent increase because ours did increase upon lease renewal, but the market at the time had also moved significantly.

#6 Kiwi Bicycle

Posted 17 May 2020 - 05:26 PM

It's for lease as the builder or owner doesn't want to risk the market at the moment or doesn't want to add competition to the ones already for sale.
I would expect after 6 months the property would be listed for sale of the market rises or that you would be only offered another 6 months so they can wait for a better time.
Developers don't normally sit for years on property, they need cash flow. I think however current events mean they are happy to have rent coming in to cover overheads.

#7 Moo point

Posted 17 May 2020 - 06:08 PM

I'm in NSW and in 20 years of renting I've never been offered more than a 6 month lease. And every property has continued on a periodic lease at the end of that time. We've been in our current property for almost 11.5 years, and never signed beyond the initial 6 month lease - we get asked every year but we've refused as we want to buy our own place or keep our options open for other rentals (yeah life and then pandemics got in the way!) Only ever had small rent increases and none in 2 years.

If the landlord owns other properties I wouldn't be as concerned as if it was a mum and dad investor who may need to sell or move back in in a hurry.

#8 mylittlemen

Posted 17 May 2020 - 06:21 PM

Where we live, rents have crashed - airbnb properties have flooded the market. I’d assume they were giving a low rent for the first 6 months to get someone, anyone, in then look to increase the rent back to normal as soon as the economy got back on track.

The rental crash has made the press:

https://www.google.c...mic-946886/amp/

Edited by mylittlemen, 17 May 2020 - 06:22 PM.


#9 Dianalynch

Posted 17 May 2020 - 06:36 PM

Agree with pp, rental prices are way down, negotiate a 12 month lease if you can, there’s lots of vacant properties so you might get lucky. I’d also be worried about them selling.

eta we just had a rental appraisal on our place, I know that some people are advertising a lower price now and are looking to increase after 6 months. So yes, it is likely the rent will increase. Go hard on a 12 month lease.

Edited by Dianalynch, 17 May 2020 - 06:41 PM.


#10 all-of-us

Posted 17 May 2020 - 07:26 PM

we have two homes (one on farm and one off before marriage) -: first farm house was reviewed by RA -: and they suggested we put up the rent as tenant is month by month (what he wanted at the beginning) -: this was after we said we want this tenant to stay for as long as
possible.  After that we changed agents.

Town house -: was Airbnb -: talked about renting for 6 mths -: agent said they disclose to all that its 6 mths and may not be renewed.  

So I’m guessing it’s the agent not being completely up front

#11 annodam

Posted 17 May 2020 - 07:28 PM

I just rented out my pace last week after being vacated on March 3rd.  I offered my new Tenant a 12mo Lease (it never even crossed my mind to offer less).
Incidentally, nothing has crashed where I am, 50 applicants my REA interviewed for my place.


ETA:  I increased the rent as well from what it was previously.

Edited by annodam, 17 May 2020 - 07:30 PM.


#12 Chchgirl

Posted 17 May 2020 - 08:07 PM

I wouldn't take a six month lease but there are plenty of 12 months ones sitting vacant where I am so there is choice.

#13 Chamomile

Posted 17 May 2020 - 08:23 PM

I think when there is choice around, you can request a 12 month lease or don’t sign.
(I don’t think the rationale they’ve given for the 6 month lease is believable).
And if they won’t budge on the 6 month lease, then you know they’ve got other plans.

Edited by Chamomile, 17 May 2020 - 08:27 PM.


#14 born.a.girl

Posted 17 May 2020 - 09:04 PM

 Chamomile, on 17 May 2020 - 08:23 PM, said:

I think when there is choice around, you can request a 12 month lease or don’t sign.
(I don’t think the rationale they’ve given for the 6 month lease is believable).
And if they won’t budge on the 6 month lease, then you know they’ve got other plans.

Good point.

#15 Prancer is coming

Posted 17 May 2020 - 10:04 PM

We rent out a house.  We have had the same tenants for years, but I am pretty sure out landlord recommended that we offer a 6 month lease as the if anything goes wrong with the tenancy we can get rid of them earlier.  I also believe that you can put rent up whoever you want, as long as you give specific notice. Probably just easier to do as part of lease renewal.

I think things are pretty uncertain in this time, both for the property market and people’s income and ability to afford rent.  I don’t think you can read much into their intentions in 6 months time.

#16 PuddingPlease

Posted 18 May 2020 - 01:50 PM

View PostLime-Polka-Dot, on 17 May 2020 - 03:23 PM, said:

I've been offered a lease on a lovely, very affordable place in my dream location. The property manager didn't mention it was only a 6 month lease to be extended after this time if obligations are met (paying rent on time and keeping the property in good condition) Until I recieved a copy of the lease.

I am a little concerned about the rent being increased after the 6 month lease and asked the property manager if this is likely. The response was that no discussion around this has been had with the landlord and 6 months is the new standard due to covid 19.

Is this normal for other agencies at the moment? Should I be concerned about a significant rent increase in 6 months? I'm in Victoria.

Your best option depends very much on your specific circumstances but the 'new standard due to Covid' explanation does not pass the sniff test for me and sounds like a straight up lie.

Why would an environment where many people will be moving back in with family, that will likely involve a crash in rental prices and no tourism (overseas or domestic) cause agents to shorten leases? Keeping properties tenanted has got more difficult, why would they have a policy that would seem to make it harder to retain tenants?  

They are clearly keeping their options open and moving can be expensive, if you have the option I would push for 12 months.

#17 elmo_mum

Posted 18 May 2020 - 03:27 PM

i wouldnt take a 6 month lease - rent increase or not

my brother and sister in law had a 6 month leaser - were promnised the same thing - pay on time, be good tenants and it will be extended... bla bla

5 months later - yea not sorry, ot renewing the leaser,  our kids are moving in. see ya!

tell them  you can tale a 12 month lease.. they can still increase rent after 10months?? i think...

so, thats a no from me

#18 2bundles

Posted 20 May 2020 - 07:05 AM

Ask for a clause to be inserted saying “subject to timely payment of rent and satisfactory inspections, a further option of 6mths will be granted at expiry of this lease”.

#19 CallMeFeral

Posted 20 May 2020 - 03:38 PM

I think the chances are high that they are planning to check the market in 6 months to see if it will bear a rent rise. And if it will, they will be looking to raise the rent.




 2bundles, on 20 May 2020 - 07:05 AM, said:

Ask for a clause to be inserted saying “subject to timely payment of rent and satisfactory inspections, a further option of 6mths will be granted at expiry of this lease at the same rent”.


#20 PuddingPlease

Posted 20 May 2020 - 04:21 PM

What did you decide to do, OP?

#21 born.a.girl

Posted 21 May 2020 - 10:20 AM

People might find this article interesting.

Whatever people's individual experiences on either side of the fence, the overall picture is one of softening rents at a minimum.

OP even though your property might to be an ex airbnb one, plenty of others are, so they will be affecting the supply side.


I don't have much knowledge of this on any front, but given what we do know, it certainly looks likely that they might be hoping that rent can be increased in six months time.

If it's you for 12 months, or no one for another month or two, I'd fancy your chances of getting what you want.

https://www.theguard...onavirus-crisis

#22 Holly298

Posted 21 May 2020 - 11:45 AM

Most agents are doing 6 month leases at the moment for new tenants purely to make sure your rent can be paid - a lot of tenants cannot and they can’t be evicted - rents will not be going up in 6 months so I highly doubt that is the reason or potentially the landlord may be considering selling and long term leases are not good for that

#23 born.a.girl

Posted 21 May 2020 - 11:53 AM

 Holly298, on 21 May 2020 - 11:45 AM, said:

Most agents are doing 6 month leases at the moment for new tenants purely to make sure your rent can be paid - a lot of tenants cannot and they can’t be evicted - rents will not be going up in 6 months so I highly doubt that is the reason or potentially the landlord may be considering selling and long term leases are not good for that


That's exactly why tenants are wary of six month leases.

They get told that it can be renewed if rent etc is paid on time, then whammo, find out it's being sold (and I fully acknowledge many of those would not have known all along, but enough would have in order for it to be a problem).


To tell people it can be extended if all is well WHEN you are already considering selling is unethical.

Again, I stress not all know that at the time, but given you state it as a good reason to only offer a six month lease, obviously it's not uncommon.

Relative of a friend has had to move twice now, both within 12 months because of selling or moving back in when he desperately just wants a place to prop. That's involved moving expenses that he just doesn't have the cash for, plus a new bond before the next one's back (which he's had to borrow from my friend).

All I can say is the number of times this happens, indicates some people should be investing their money elsewhere.

#24 Holly298

Posted 21 May 2020 - 12:41 PM

agreed - but we've had a few landlords that are trying to hang on to their investments but have to keep their options open just in case , most don't want to sell as they will lose money but are doing so out of necessity -  trust me I've had very wealthy landlords who never in a million years would think they would need too be selling their long term investments but they have never had their businesses literally stop trading before and that is there only access to money

#25 born.a.girl

Posted 21 May 2020 - 01:45 PM

View PostHolly298, on 21 May 2020 - 12:41 PM, said:

agreed - but we've had a few landlords that are trying to hang on to their investments but have to keep their options open just in case , most don't want to sell as they will lose money but are doing so out of necessity -  trust me I've had very wealthy landlords who never in a million years would think they would need too be selling their long term investments but they have never had their businesses literally stop trading before and that is there only access to money


Absolutely, as a plague, any precedent goes back 100 years.  I also saw these sorts of situations in the late eighties, with people having to sell their investment properties and their own home and still end up owing money.  Some of them will have never recovered financially, and that will also happen to people now.


I just object to the idea that you can tell a tenant that it's only six months to make sure the tenant is up to scratch.  If you want to keep your options open don't tell them that. Say it's six months, sorry, no guarantees beyond that. They are only saying what they do in the hope a tenant believes it.

I'd like them to be honest - I want to keep my selling options open.  Heck that might even attract tenants who hope to buy something similar and are nearing the point where they can.




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