You’ve probably heard about the shifting property market, with rental prices dropping year on year in some cities, and vacancy rates increasing – particularly in Sydney – where the vacancy rate is at its highest in 13 years, at 2.8%.
But how does that affect you as a landlord, and what do you need to do to move with the market? Here, we share some tips.
The market low-down
According to rent.com.au, Sydney is seeing a notable drop in house rental prices, with a decrease of 3.2% from June 2017-June 2018. Apartments in Sydney stayed flat for the same period, maintaining their median price of $550/week.
Melbourne, on the other hand, sees decent growth for the same period, with an increase of 3.8% to $410/week for apartments, and an increase of 5% to $420/week for houses.
The real shift, however, is seen in the amount of time it takes for rental properties to be leased – that is, the number of days on the market. In June 2018, Sydney apartments were 25% slower to be leased than the year prior, with apartments sitting for an average of 25.1 days on the market. Houses aren’t faring much better, with an average of 26 days on the market; an 18% decrease versus the same period last year. For landlords, this can mean they don’t receive rental payments for up to a month – a potential big hit to their back pocket. Every week that a property is vacant, it reduces the owner’s profits by 2%.
In Melbourne, apartments are being leased 8% faster than last year, while houses remain relatively stable with just a 1% drop in the number of days on the market.
So, as an owner, what do you need to keep in mind to stay ahead of the market?
Work with a trusted property manager
As rental prices fall, you need to have an open and honest relationship with your property manager so you can be sure they are giving you the best advice when it comes to securing the right price for your property.
Transparency is an important part of building a good relationship. At :Different, you’ll find everything you need in your Owner Portal, and we’re here to help if you have any questions. And in a shifting market, trusting that your rental income will be paid on time is even more important – as part of our rent guarantee, if your tenant is more than 5 days late in paying your rent, we’ll pay it to you.
Keep an eye out for gimmicks and tricks to draw you in – ‘free ads’ often lure in landlords, but these can be poor quality and cost much more in the long run.
"Transparency is an important part of building a good relationship"
On average, houses in Sydney and Melbourne are taking longer to lease. Given this, it’s important to understand the specific data for your property and suburb, and be prepared to be flexible. That doesn’t necessarily mean dropping your price (although you may have to be prepared for that too, with rental prices falling) – it could mean being open to different types of tenants, or giving permission for extra requests, like having a pet at the property. Either way, your property manager will be well educated on the current market state, so talk with them to get the best outcome for you.
Use every weapon in your armoury
Don’t be complacent. Attract the right tenants quickly with great photos and targeted advertising. At :Different, to help you stand out, we use premium listings with videos and floor plans of key rooms and virtual staging, which generates more qualified interest.
Show your property as much as possible, with private viewings, and midweek and weekend open houses to maximise the number of potential tenants through your door.
"Attract the right tenants quickly with great photos and targeted advertising."
Keep your property in tip-top shape
Good tenants are worth their weight (almost literally) in gold. Keep your property in great shape – and your tenants happy – by quickly fixing any issues that arise. Make sure your property manager is quick to action any maintenance requests – or better yet, work with us at Different, as we use our technology to find the best person quickly, and ensure a top-notch job.
Your tenants will be happy, and more likely to stay put in your property. Win-win.