Is your property taking longer than you expected to rent out? Are there fewer people attending the opens? In case you haven’t heard, the rental market is shifting toward a tenants market. In some areas there is a surplus of properties on the market and for the first time in a long time tenants are not having to clamber over themselves trying to secure a property.
There are measures you can take to ensure you are not left with a vacant property for an extended period of time.
The three key areas we look at are:
- Price
- Position
- Presentation
Let’s look at these in more detail.
Price
This is the obvious one and sometimes the fastest to implement. The shift in this market means your investment property’s weekly rent may not necessarily be worth more than it was a year ago. There is a misconception in the market that rents increase yearly. While this might be the trend it is not a guarantee. It’s critical that you pitch your rent in line with what the market is telling you and you gauge that from what is going on in your local marketplace.
Do your research around what else is for lease and look constructively at where your property sits amongst other similar properties that are currently for lease, www.househunting.com.au is a helpful comparison site as it matches up comparable properties side by side. You can also look at historical data with platforms like RP Data but don’t look much further than the last three months.
The feedback from open inspections is a good indicator as well, if people are telling you that the property is overpriced then you need to consider that feedback. These are the people who are trooping around every Saturday viewing multiple properties, they are your eyes and ears on the ground.
Position (Marketing)
Is your property in a quiet street or a main road, urban or rural? Is it close to amenities and local schools or off the beaten track? Clearly you can’t change the position of your property but what you can do is target your marketing to the audience who most loves the location of your property.
It’s a waste of everyones time the property description is not accurate and specific. If the property is above a noisy, crowded, inner city dining precinct then target to young singles who are likely to love the fact they are in the thick of it and are not old enough to value sleep. Equally if your property is in the deepest darkest suburbia then look to young families and older couples who place a higher value on peace and quiet (and possibly sleep).
Don’t be afraid of ruling out people by having specific copy and images in your marketing. You will get better quality applicants if you are transparent about the property and highlight it’s unique features.
Presentation
Most of the time the property is being re-leased while the existing tenants are still in the property. Ideally you have a great relationship with the tenants, so they are happy to help you re-lease the property and are going out of their way to keep it clean and presentable. The reality may be that they have a different idea on what is presentable. Some tips are:
- Provide them with a checklist of items to get fixed up and kept up to date throughout the leasing period
- Incentivise them with a bottle of wine or a voucher to a local restaurant as a thank you for their help
- Provide a cleaner to do a quick 1 hour clean up before the open to show them what ‘clean’ standard you are after
It could cost you $100 to get this right but it’s worth it if your property leases faster. The average weekly rent in Sydney is $560 so every week your property is vacant is costing you hundreds of dollars.
You may need a combination of the three points we have addressed, or it could be one. Generally, when we advertise a property if we don’t get a good response in the first week we change something. Don’t keep doing the same thing and expecting a different result.
Your property will have the best exposure online in the first two weeks so it’s wise to maximise these weeks and present a property that meets market expectations on price and speaks to the right target audience. You purchased this investment property to make money and minimising vacancy is a big part of this.
