I am sure you have been keeping up to speed with the state of the rental market in and around Sydney. Prior to 2018 Sydney had experienced significant renal growth over the previous 5 to 7 years, however the influx of new apartments coming online together with a population movement interstate have combined to produce a rare market where renters are beginning to call the shots. So what can you do as a landlord to ensure you have and/or secure a quality tenant?
1) Consider a ‘reset’ – Real estate, like all investments move in cycles. A larger portion of our clients have done very very well over the past. If your property is vacant we would encourage you to take this opportunity to ‘reset’ the property in terms of its appeal. Rather than just a freshen up of painting and carpets consider whether it is time for new lighting, kitchens, bathrooms. Remember you are competing with new product coming onto the market. We find people in Sydney are prepared to pay for quality living.
2) Don’t be afraid to drop the rent – We often see landlords trying holding rents at previous levels or increasing them in competitive markets, we are currently in a decreasing market.
Let’s say we are renting a property with an asking rental of $500 per week, therefore $26,000 pa. Via market feedback and inspections the market is indicating this is high. If we stick to the $500 per week and don’t adjust the rent to market it only takes three weeks of vacancy to have 5% impact on the annual rent, reducing it to $24,500 pa or $471 per week and five weeks to have a 10% impact on annual returns, reducing the annual rental to $23,500 or $452 per week. The astute move is to negotiate with any potential tenant straight away and lock in what is perceived as a discount on the asking rent. In this instance a rent in the order of $485 per week.
At Wills Property we work closely with you to ensure your investment is protected for the long term. If you are interested in finding out how you property can be better positioned feel free to reach out and see how we can better assist you.
+61 467 44 38 38