Having Trouble Finding A Tenant?
Home has never been more important than during this pandemic. But the economic impact of COVID-19 has profoundly impacted many Australians lives, living arrangements, and for property investors, it has become a time of much uncertainty.
Many landlords are sitting tight with their fingers crossed hoping their tenant’s situations don’t change too drastically and can continue to pay their rent. Some are already in rental negotiations with tenants.
While some suburbs and cities will be impacted more than others, we are already seeing trends emerge across the country that are affecting the rental market.
Increased unemployment – Job losses and pay cuts are clearly a defining factor in rent affordability.
Rental search activity is down1 – Many people are sitting tight in an uncertain employment market and considering moving in with family or friends.
Rental listings are on the rise – Short term and holiday accommodations are coming on to the longer-term rental market with the collapse of the holiday and tourism market. Domain Group has seen a 10% rise nationally between 30 March and 26 April compared to a year ago2.
International student rentals sit empty – Some student rentals are sitting empty waiting for travel restrictions to lift3.
What can you do to find yourself a tenant, FAST?
In a softening rental market, it is important to do your homework, make your property stand out from the rest, and potentially offer incentives or discounts to secure yourself the best tenant possible.
A good property manager should advertise the property well (write a compelling listing and use high quality photos) and screen the applicants, but you too can make your property more appealing to potential tenants.
Understand your target market
Put yourself in the shoes of your potential tenants. Think about the ideal features of a home you would look for if you were the house hunter.
Is your property a house that typically attracts families, or is it an apartment close to a major city where younger singles or couples tend to live? What features in a property would they prefer?
Increase value with features
To attract quality tenants, invest in appealing features such as air conditioning, storage space, dishwasher, or built in wardrobes. Although these come at an upfront cost, they can boost your long-term rental yield and give your property the edge over others.
Offer incentives or discounts
Could you offer two weeks’ free rent, include WiFi or free Netflix, or reduce the rent for the first three, six or 12 months of the rental agreement?
You won’t be the only one! Some capital cities are reporting rent reductions of up to $200 - $300 a week to secure new tenants4.
It is important to do the numbers, but when times are tough in a soft rental market, it may be necessary to offer incentives or discounts to ensure your property is not empty for too long.
Keep your eye on the long-term impact of discounts or incentives. For example, $50 per week discount would amount to $1,560 over 12 months. That income could go towards property maintenance or costs such as council, water or strata rates.
What if my current tenants can’t pay their rent?
The government rental relief initiatives and other protections for financial victims of COVID-19 will start to roll out.
Each state and territory government is responsible to work through the rental relief detail and pass the bills to make them law.
While assistance can differ state by state, the clear message from government is for landlords and tenants to negotiate fairly to see them through these challenging times.
See each state or territory for details:
Australian Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia
Don’t despair!
As we have seen over the years during other economic downturns, the economy will recover, and the property market will bounce back.
Property investment is a long-term strategy and sometimes requires patience and certainly persistence. You are not alone. There are many Australians battling and negotiating through this pandemic.
We are here to share our knowledge and support you through these challenging times. Knowledge is power. The more you know to navigate through this downturn, the better equipped you will be to survive and thrive.
If you'd like help with assessing your personal and financial situation, as well as comparing the loans in the market to see if you're truly getting the right deal for you, then call Bob Malpass now on 0431 862 136, email [email protected]
Thanks for reading
Bob
Source:
1. Realestate.com.au, Rental market takes a hit from COVID-19
2. ABC News, Rental listings surge, rents head in opposite direct, as thousands of Airbnbs tipped to add to supply
3 . Domain, Coronavirus outbreak: Melbourne rentals sit empty as students wait in China
4. Domain, Sydney rental properties offered at half price to secure tenants amid coronavirus pandemic
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