Page 110 - planet_rent

7.2 Budget No. 2 - Rent Management Budget

7.2.1 The rent management budget has several components;
 managing voids between tenancies,
 modelling rent discounts,
 modelling tenant incentives and welcome gifts,
 planning for tenant mis-use, repairs & recoverables,
 education to encourage better apartment care,
 planning for landlord’s utility void,
 durability of fittings provided.

7.2.2 The separate operation of a rent management budget is important to keep a tight control on wear
and tear and ensure that damage recharging to tenants is maximised. For modelling purposes we
usually prepare two models:
(1) void rate as 7 days on 35% of units which is generous,
(2) void rate at 4 days on 35% as a comparison.
Some creep needs to be modelled into the ‘rent management’ budget because as the building ages
jobs such as plumbing repairs and sealing showers will become more frequent over the years. If the
site size warrants a Maintenance Engineer being employed then there are opportunities for
preventative measures such as re-sealing bathrooms and kitchens between tenancies. Savings on
the ‘rent management’ budget could include:
 OMIT servicing to heat exchangers in apartments in favour of a leave till fail policy,
 OMIT microwaves and portable appliances to apartments.

7.2.3 Tenant recoverables should also be allowed for example:
 Insurance claims excesses caused by tenant waste/neglect @ 80%
 Curtain/blind damage @ 80%
 End of tenancy cleans @ 100%
 Exit inventories @ 100%

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