If your property is sitting vacant, as an investor, you are missing out on valuable income. We’ve put together a list of the most common reasons properties don’t rent (and how you can fix them).
The price is not right
It’s important to remember that you can’t beat the market. If you price inaccurately, you are facing the possibility of longer vacancy.
To get your pricing as competitive as possible, do some research on similar properties for rent in the surrounding suburbs. You can use popular listing websites such as realestate.com.au or data tools such as RP Data. Keep in mind any distinguishing features that may make it stand out and be more valuable.
Many people think they can stick an extra $20 per week on their property and make a lot of extra money, but if there are similar properties in the area that are cheaper, no one will rent the more expensive one.
In the end, you’re much better off getting the property rented and having a consistent cash flow than fighting over a few extra dollars per week. The vacancy can quickly stack up and cost you a lot more than just dropping your rent to a competitive price.
Consider a rental property that is $500 per week and the owner decides to keep the price as it is despite a slowing market and softening rents. This may cost you 4 weeks’ vacancy over the year, which would cost you $2000, meaning your annual rental income goes from $26,000 to $24,000. If you decided instead to drop the rent to $490 per week, you’re losing a bit of money weekly, but over the course of the year, your rental income will be $25,480. $25,480 > $24,000 – simple!
Your marketing isn’t compelling.
The marketing of a rental property plays an absolutely vital part in getting it rented quickly. This can include signboards, online marketing, email marketing and print marketing. A clever and tailored marketing strategy can make the difference between finding tenants quickly and having the property sit vacant for longer than expected.
As a large portion of the renting population is in a young age bracket, online marketing is extremely important. This means getting good quality photos and including all the necessary information in the property description, such as number of bedrooms & bathrooms, size, inclusions, weekly rent, deposit etc.
Your policies restrict your prospective tenant pool.
In a ‘renter’s market’, i.e. when supply is high, it can help to provide a point of difference through your rental policies.
A great example of this is making your property pet-friendly, which allows you to operate in a more niche market where demand might be higher relative to supply. In fact, there are a number of benefits to having a pet-friendly property. Click here to read our article on why you should have a pet-friendly rental property.
Setting yourself apart from the competition through being pet-friendly, having a flexible bond payment plan, or having multiple lease term options can really help get your property rented quickly.
Your property doesn’t present well.
Is your property looking the best it could possibly be? Tenants can be picky, so it’s important that your house or unit is up to scratch. This means ensuring the appliances are working, the paint looks reasonably fresh, taking care of any repairs that need to be done, tending to the garden and yard etc.
Remember: if you don’t want to live in the property, there’s a good chance that no one else wants to either. Keeping the property well maintained can be costly, but it’s worth it to attract the attention of long-term tenants.
The other thing to be mindful of is that expectations are being met at inspections. Have you got plenty of interest online and at inspections but you find no one is following through with an application?
First impressions are important and it’s critical that your online marketing is appealing to prospective tenants; however, it’s equally important not to lie in your marketing. Don’t create features the property doesn’t have and don’t misrepresent the features it does have. This means not advertising a study or multi-purpose room as a bedroom or a powder room as a full bathroom. You want prospective tenants’ expectations to be met when they see the property in person, not be underwhelmed.
The market is simply saturated.
The rental market is never static. Supply and demand will constantly change which affects the price and vacancy of your property.
Demand is uncontrollable, but you can always adapt to combat different market conditions. Other than lowering your rent in high demand periods (as discussed above, sometimes you have to accept that this will happen as it’s better to lower your rent than to have a vacant property), you can also react quickly to market cycles. For example, if you have a property near a university, you can align lease start dates to be at the start of the semester, when demand is high.
If you are asking yourself why your property isn’t renting, you might need to consider hiring a property manager or switching from your existing one. Get in touch with one of our senior property managers by emailing [email protected] or get in touch with Ed Cassidy directly on [email protected] / 0403 331 236.