Think smarter in a softening rental market
A new report from CoreLogic RP Data shows rents have grown by just 0.9 per cent over the past year – which is the weakest rate of growth since they started compiling data in 1995.
Not only is there a large variety of properties available for rent in Brisbane – from older established houses and units through to the multiple brand new developments going up, but there is also more of them thanks to the number of savvy investors cashing in on the low interest rates.
Renters are spoilt for choice these days, and given that a substantial number of Australian Gen Y’s have already resigned themselves to the idea of renting for life, they will search for a house or unit that stands out and offers good value for money.
Therefore, landlords need to start thinking smarter in a softening rental market, especially when the amount of properties available for rent increases.
If you have decided to rent your property out in an oversupplied market, you need to
- Make it stand out so that it appeals to more people. Think low maintenance, fresh coat of paint, new carpet and everything in working condition (smoke alarms, taps, power sockets, security)
- Employ a trustworthy and efficient property manager to communicate with your tenants on a regular basis and
- Set a realistic rental price (which your property manager will help you with)
At the end of the day, renters will choose a property that they can imagine themselves living in and somewhere they can create a home so a property that photographs well will draw more people in for inspections than one that doesn’t.
On the other hand, landlords with existing tenants need to be vigilant. Rental returns are key for the landlord’s financial security and naturally, everyone wants to receive the maximum yields possible.
Therefore, while supply is high, landlords may need to keep the rental price at the same level instead of increasing them with each new lease. Secondly, ensure that you keep the tenants happy – act quickly upon any repairs and accept the cost (which is tax deductible or at least depreciable).
If a tenant feels secure and well looked after in a property, they won’t be tempted to move out for a cheaper or different option in the same suburb.
MEDIAN RENTS ACROSS THE CAPITAL CITIES
Brisbane Houses $436 pw | Apartments $408 pw
Sydney Houses $610 pw | Apartments $536 pw
Darwin Houses $575 pw | Apartments $459 pw
Canberra Houses $504 pw | Apartments $403 pw
Perth Houses $472 pw | Apartments $419 pw
Melbourne Houses $456 pw | Apartments $404 pw
Adelaide Houses $373 pw | Apartments $317 pw
Hobart Houses $343 pw | Apartments $298 pw