The battle is underway: Competing for tenants for your Brisbane investment!
Unless you’re the owner of a Brisbane investment property who’s living in a far-flung corner of the globe, you’ll be well aware of the seismic change in our rental market over the past 5 years! There’s been 36,000 extra rental homes added in Brisbane over that time, a whopping 25% increase in our supply. With so much new stock, and especially so many brand new apartments, how can your property compete for tenants?!
Our recent tenant survey helped reconfirm what we already knew – Brisbane’s tenants like a well-presented home. Almost 40% said a “modern home or one in great condition” was essential, while only 11% thought it not important. They don’t need brand new. But with so much choice for tenants in modern homes, your property is going to need high level presentation next time it becomes vacant.
We’ve already seen this demand trend playing out in extended vacancy where apartments have older laminate kitchens for example, and bathrooms that were new or last renovated 20 years or more ago. The number of tenants interested to apply has slipped noticeably. And even with new carpets and paint, and good overall maintenance, pre-2000 homes simply don’t have the same appeal when our market has been inundated with shiny new fittings in sparkling new buildings. Stone benchtops are no longer a luxury choice in kitchens – they’re now expected, or the ‘benchmark’ (so to speak!)
Unsurprisingly, many of our clients are now choosing to upgrade their apartments, biting the renovation bullet and replacing kitchens and bathrooms. And the transformations can be remarkable! Take a look at this before and after on a 2 bed, 2 bath apartment. A big step up in presentation that earned the owner another $90 per week in rent. Tenant demand climbs, vacancy reduces and rent increases – as does the property’s value.
There’s usually two hurdles for investors doing a bigger scale renovation: the cost and the time to co-ordinate various trades. So we’ve connected with a specialist who has a long track record of working in apartment renos (managing body corp approvals, access in lifts, cranky neighbours etc etc!) and can complete the full job. Lisa Beisel of Home and Apartment Solutions says the example above cost around $45,000, and she can tailor her service to smaller budgets if investors need to stage their works.
Usually this cost will be a tax deduction (insert strong suggestion for professional advice!) and we know first hand from our leasing team that the interest in a freshly upgraded apartment is always very strong. Often apartments from the 1990’s and earlier are bigger than new ones, so once they’re competitive with fresh kitchens and bathrooms they’re very popular and their investment lives are extended dramatically.
Make no mistake – there will always be tenant interest in older style and unrenovated homes. They’re cheaper. And we understand apartment prices are down and many investors are behind on their original purchase prices. (I’m one of them!) It’s hard to spend more money on an asset like that. But if you’re going to hold onto your Brisbane investment property and want it to continue to generate solid tenant demand, bringing it up to a modern standard will become more and more critical.
The changes of the past 5 years have been too significant, and the impact on tenant expectations too big to ignore.