Last week, Channel 10 News ran a story deeming the practice of “rental bidding” as “dirty”.
Commenting as part of the story, REINSW President Malcolm Gunning noted that rental bidding is good for the marketplace.
“It is a good, open way of doing business,” he said.
Mr Gunning was referring to the process where potential tenants offer to pay more than the asking rental price. The process is not so much a “bidding” scenario as suggested by the Channel 10 story, but rather one of negotiation; a tenant will submit in writing the rent they are offering to pay on their application and the agent then takes the offer to the landlord.
“We’ve all heard the stories about agents being unreliable and untrustworthy, and this Channel 10 story just piggy-backs on that notion,” Mr Gunning said.
“Potential tenants do sometimes need to take initiative when a property is popular. If you’re up against 40 other applicants to secure a rental property, then you need to stand out to the landlord.
“Allowing potential tenants to offer additional rent to enable them to be a more attractive prospect, is not of itself to be discouraged.”
He added that it is not always an offer of higher rent that puts a potential tenant ahead of the pack.
“Offering to paint a room, clean the backyard or improve on the property in some way can be very desirable to the landlord.”
Mr Gunning noted that rental negotiation also works for properties that are not so popular.
“If the property is receiving little interest, an agent can encourage the landlord to allow potential tenants to offer a reduced rental price,” he said.
“At the moment, rental demand is currently outweighing supply,” he said.
“The Sydney market in particular is very popular and receives a lot of attention from the media. Popular locations are achieving very good rental prices and that is the landlord’s prerogative.”
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