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PPG_Blog_Feb_image 3_top tips to reduce the risk of vacancy

Melbourne’s rental vacancy rate (the percentage of vacant rental properties at any given time) has been hovering between 2.5 per cent and 3.5 per cent since the beginning of 2011 – representing a relatively balanced market place. According to REIV data, it currently sits at 3.1 per cent and has been slowly creeping up since its May last year. What appears like small, incremental changes can in fact cause pain for landlords whose properties are not positioned in the market place correctly.

Obviously the aim of any landlord is to have their investment property 100 per cent of the time. Any vacant time costs money – each week equates to approximately 2 percent of yearly rental income – and the longer it is vacant, the more lost income is at stake. Whether you property is tenanted, coming onto the market or currently vacant, here are a few key tips to reduce the risk of vacancy:

Setting the right rent

Your local PPG property manager will be able to provide you with a current market valuation. They will take into consideration supply and demand equations, as well as the individual attributes of your property. Trying to add on an extra $10 a week when the market is relatively even, will not do you any favours. It’s a simple equation. If your property attracts $350 a week and is untenanted for three weeks because the pricing is too high, you’ve already wiped out the potential annual gain of the rental increase!

Presentation

First impressions count for a lot in the property market – rental or otherwise. A simple investment of a few hundred dollars to freshen up with a coat of paint or replace tired window fittings will pay dividends when it comes to attracting tenants. Other bigger ticket improvements that matter to tenants are a modern kitchen appliances and a renovated bathroom. Presentation

Tenant selection

Using the services of a professional property management team can take the stress out of the tenant selection process. As the landlord, you will always have the final sign off, but property management teams often have existing databases of screened tenants, and any new applicants will have to pass a strict selection process. Although you will pay a monthly service fee for professional property management, those costs are tax deductible.

Prompt Maintenance

If your property is already tenanted and everyone’s happy, you want to keep it that way! Maintenance problems may not be at the heart of most break ups between tenant and property, but they can push a wavering tenant back into the market place. Prompt maintenance is a simple way to develop tenant loyalty and therefore reduce the risk of your property sitting vacant. Discuss the maintenance process with your property manager, emphasising that you would like to be across all issues as they arise and expect prompt attention when anything goes wrong.

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