Purchasing a new apartment? Our 6 tips to securing quality tenants quickly!
With the large number of new developments nearing completion in Brisbane’s inner-city I think this is a hot topic at the moment. We first began renting apartments in new developments in the mid 1990’s and have picked up a few tips along the way that can help you minimise your initial vacancy periods. The first letting is the hardest. An obvious comment but you often have stacks of competitors in your own building – all similar, same location and available at the same time. How will you stand out of the crowd?
1. Don’t be afraid to compete on price. All landlords want to achieve the highest possible rent for their property, as do their Property Managers. What’s equally important is having a good tenant in place paying rent – and soon. Sometimes the blinkers come on and landlords and agents can be guilty of seeing only the rent they want and not the rent they are losing by having the property vacant. So what’s better for you financially? To get the best possible rental price, or reduce the vacancy of the property?
When a new development is launched there is a saturation of the market that lasts until the bulk of apartments have been leased. Drop your rent now in anticipation of aggressive rent reviews at lease renewal or re-letting time. There’ll be less direct competition then. Let’s compare:
– $550 per week for 6 months is $14,300
– $550 per week for 6 months but with a vacancy of 4 weeks is $12,100
– $500 per week for 6 months is $13,000
– $500 per week for 6 months but with a vacancy of only 1 week is $12,500 (less the stress!)
Leaving your property sit vacant for more than a week or two can be more detrimental to your bottom line than you might think. People also ask us about the benefits of keeping your tenants happy by only charging them a sensible rent and not pushing their limits. This can be true and there’s no doubt a low turnover of tenants, provided they look after the property and pay their rent, will save you money.
2. Get your marketing right. This means professional photos (don’t use the ones from the developer – you’ll just look like all the others in the building!) and a feature ad on the major websites. Feature ads normally last 30 days and mean your property will be listed on the first search page boosting your exposure to potential tenants, and giving you an edge over the crowd.
3. Use an external property manager. Initially onsite managers will have a large number of apartments that they need to rent at the one time. An external agent will generally only have a couple they are concentrating on leasing.
4. Try your best to get a head start on the competition. Make it a condition of contract that you are allowed viewings by prospective tenants once your purchase is unconditional and the building is safe to access.
5. Be aware of the range your rent falls into on the property portals. For example a rent of $495 will be in the bracket of $450 – $500 where $505 falls into $500 – $550 per week, and this can make a huge difference to your enquiry.
6. Offer 8 or 11 month leases to avoid falling into the same re-letting cycle as other apartments in the building.
Hopefully these tips will help you secure a good tenant fast and also decrease the stress levels involved in purchasing an investment property. If you would like a 3rd party rental appraisal on a property you are considering purchasing contact our Brisbane Property Management team on 07 3214 6815 or firstname.lastname@example.org