Best Practice Advice for Avoiding Vacant Properties – June 2015
by Murray Ireland
The Christchurch rental market has enjoyed significant rental growth over the past two years however the market is now showing signs of changing. The demand for properties has plateaued and we are seeing higher numbers of rental properties available for tenants to consider.
As a result, tenants are more discerning about which property they want to live in and the associated rental price. This will slowly start to impact on the market’s current rental asking prices and investors will need to review their rents to order to attract or in some cases, retain tenants.
Irelands Property Management is an accredited “Best Practice” agency and we provide this advice when the current rental market forces are occurring.
Optimising Your Rental Income in the Present Market
Maintain Rent at 95% of the Property’s Market Value
Nothing impacts on property investment performance more than having a vacant investment property. A vacant property means nil income for the investor.
Irelands recommends maintaining the rent at 95% of market value. Properties that are rented just below market value attract quality tenants who stay longer and pay their rent on time.
www.trademe.co.nz automatically produces an activity report every week, and the content can be directly discussed with you to ensure the results of vacancy are clearly understood. Discuss this with your Property Manager or give the team at Irelands a call to discuss in more depth.
Minimise Your Vacancies
Vacant Properties after 10 Days of Advertising
If a property has not been rented within 10 days, adjusting the asking rent by 10% is an industry best practice (provided the property is well maintained and presents well).
The investment will produce a better result if rented at 90% of the asking rent as opposed to being vacant at 100% of the asking rent.
Your Irelands’ Property Manager will work with you in setting the best rental price to attract the best tenant. Typically, quality tenants in todays’ market are attracted to quality properties with rent at an acceptable value.
Experienced Investors know:
A constant rental income is better than no rental income. By having a vacant property, it is no longer an investment but a liability until it is tenanted.