Well for our landlord’s with property located in ‘inner Melbourne’ 4-10k of the CBD the vacancy rates are sitting at 2.6% which isn’t a whole lot better. Funnily enough 3% is supposed to equate to a balanced market but it generally doesn’t feel that way, particularly for our long suffering landlords who have seen rentals flatten for a number of years and sometimes even go backwards.
Basically 2.6% means there is more property than there are tenants, so landlord and property managers need to be creative and pragmatic in their approach to best to attract and retain good quality tenants. When vacancy rates are at this level we commonly see people applying for properties then subsequently withdrawing, we often have applicants negotiating on rent or making their application for tenancy subject to some condition, i.e. instillation of an air conditioner, permission to retain a pet and so on.
What can landlords do to protect their interests?
For those with a pending vacancy I recommend the following:
- commence advertising as soon as your tenant gives notice to vacate
- obtain permission from the tenant to immediately start showing the property to prospects
- provide incentives to existing tenant to keep the property is good order for inspections
- arrive at inspections early to open blinds, turn on lights and create an inviting atmosphere
- If the property does not present well then you shouldn’t be showing it to prospects.
- use professional photos and creative, accurate property descriptions to draw interest to your property – you need to stand out amongst all the others available
If the property is vacant you should always consider the following:
- professional internal clean, including windows
- re-paint if required
- new-carpet if required
- updated window furnishings
- tidy the garden and add some colour – first impressions are fundamental to attracting the right people
- if you don’t have heating, cooling & a dishwasher you need to seriously consider one – these are common requests and all new properties now come with them!
If you have tenants in place i recommend you do the following:
- start re-negotiating new lease terms 3 months before the existing contract expires
- always look to keep the rents at market value but if you are looking at a vacancy because of a small increase in rent calculate the cost before perusing that option
- if you feel the rent should go up you could offer an incentive in lieu of this, a new dishwasher perhaps?
All properties will lease at a price but if you want to minimise vacancy you need to be aware about what the competition is offering and stand out from the crowd.
It doesn’t all need to be bad news, this is when the good property managers will stand out form the rest, this is a time when cheap service will rear its head…Strategy, listening to the market feedback and maintaining your property to a high standard are paramount, work to retain a good tenant!