Article by Sonja Hagen
As a property manager, part of my job is to minimise any out of pocket expenses owners experience when their investment becomes vacant. There are several important things to consider during this time, the following of which are probably the most significant:
Presentation and appeal
Both are essential in minimising rent loss. Ensure the premises is well presented, clean, fresh and in good order throughout. First impressions, no matter what, always count. The past few years has not only seen a substantial amount of developments and brand new apartments along with a dramatic increase in weekly rents but this has also bought with it higher expectations from renters themselves. A modern apartment or updated unit will generate more interest than a property with worn carpets and an outdated kitchen or bathroom. Properties with air conditioning and dishwashers are looked upon favourably. Whilst these items, from an owner’s perspective, do not add capital value to the overall investment, they will appeal to potential tenants and present a more attractive option than a property without.
Competitive Asking Rent
Consider the competition. Be informed of what is available in the vacant property’s area in a similar condition with the same criteria. If the asking price is too high, many prospective tenants will be priced out of the market. On the flip side, advertise the property too low and it may attract the “wrong” kind of tenant and the out of pocket expenses may be more than anticipated to cover any shortfall in outgoings.
Quite simply, when an investment property is not generating an income, it can be a stressful time. It is important to weigh the options of reducing an asking rent (for example) by $10 per week and lease it promptly than leave a property at an inflated asking rent and have it sit vacant for a period of time. Ultimately, if the investment property is advertised at market value and is well maintained and appealing, it will present competitively to prospective tenants and reduce the length of vacancy.