Spring is in the air and with the warming weather, leasing conditions are improving. What we’re seeing is that, if the property is priced to suit the market conditions and is also presented well with professional photography, floor plans and virtual tours, they are actually moving quite quickly across the east coast of Australia.
My advice here is for investors to understand your bottom line: how much you need to achieve per week as opposed to how much you would like to achieve.
Although we’re seeing a higher level of enquiry volume overall, tenants in many markets are monitoring what properties are available, as well as what prices properties are now leasing for. This helps them determine if they should renew their existing lease or move into a similar property that is being offered at a lower weekly rent price.
That’s why it’s important to understand your bottom line. If your property remains vacant for 1 extra week, you will have lost more than if you were to adjust the price by $10 or $20 per week. As the market improves and demand increases, this means you can make up that adjustment.
Spending additional money on the best marketing campaign can also be the make or break when attracting the most suitable tenant for your property. There are other aspects to consider, like being open to pets, and understanding that, financially, individuals may now be looking to share larger houses as this can be more affordable. This means that the definition of an ideal tenant from 12 months ago has certainly changed, and will continue to change.
Being an investor is like owning a business. So if we start to look at the property as the business and take the emotion out of the decision, we start to open up our opportunities in locating the most suitable property to avoid vacancies.
:Different leasing statistics
The :Different leasing team have leased on average 49 properties per month over the last 6 months across all 3 eastern states. Interest is certainly increasing across both the South-East Queensland and New South Wales rental markets, with an influx of prospective tenants attending open inspections over the last two weekends. On average, the :Different team are receiving 3 applications per property and completing the process within 48 hours in order to limit the vacancy period as much as possible for our owners.
Under the First and Second Steps of Premier Andrews’s multi-step roadmap geared towards ‘reopening VIC’, the same heavy restrictions that are in place on the real estate industry today (under Stage 4 lockdown) will continue to apply.
It is not until the Third Step of this roadmap that private inspections will be allowed to recommence - and therefore, that the vast majority of available properties will be able to be leased.
The latest that the VIC government has stated is that the Third Step will:
“become current after October 26 AND:
- Daily average number of cases in the last 14 days is less than 5 (state-wide) AND
- Less than 5 cases with an unknown source in the last 14 days (state-wide total)
- The time period must pass AND the number of cases must be low enough to move to the next step. This is a trigger point for public health review.”
Unfortunately this means that until the Third Step is triggered, the leasing of properties will remain limited to leases that were arranged before 11.59pm on Wednesday 5th August, or where the tenant needs to move due to an emergency situation (e.g. family violence or financial hardship). One of these factors must be proven by the tenants.
We’ll continue to assess applications for properties that are currently listed for lease, and speak with prospective tenants to determine whether they meet these emergency criteria.
Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you. You should seek tax advice from your accountant, specific to your situation.