“Risk comes from not knowing what you’re doing.” – Warren Buffet
Most of us property investors dread a vacant property as we generally are dependent upon the rental income to offset our mortgage repayments. For this reason, we want to rent our property for the most amount of $$ in the least amount of time to the best tenant possible. So that you can benefit from the lessons we have learned, we have identified, and are happy to share, the below 7 methods that we implement in an attempt to minimise vacancies.
1. Retain the Current Tenant.
A bird in the hand is worth two in the bush, is the adage right? Well in this circumstance, it certainly is true. If you have a good tenant in Perth and they are happy to renew their lease for a minimum of 6 months (12 months preferred, keep them!) Regardless of a $10 / week discount they are good tenants and take care of your property in Perth.
2. Start Advertising Immediately.
We have learned that timing is of the essence. As soon as your tenant notifies you of their intention to not continue their lease, start readvertising it. We had this situation the other day, where the tenant broke the lease, and rather than chasing the tenant to perform, our advice was to terminate the lease, by mutual agreement and seek a better-suited tenant, at a higher price. Pricing your property appropriately is paramount as over-pricing is deadly and will ensure your property remains vacant and would-be tenants discount it.
3. Professional Marketing Material Makes the Difference.
You don’t know how many landlords attempt to skimp on marketing in Perth. We have advised time and time again to use a professional. Why would you entrust the marketing of one of your greatest assets with an amateur? Learn from others’ mistakes! Recently we had a landlord who has 5 investment properties that we manage refuse to invest $99 in professional photography. This is rental suicide! One the property looks absolutely horrible when in fact it is a stunning $800,000 apartment in the heart of Perth and two it will not let in the near future. Everyone loses, the owner will forgo rental income, and tenants who want to live in that area will discount it as they won’t be attracted to it.
Quality tenants recognise quality properties. This small investment will certainly be beneficial and least of all you then have the marketing collateral for the lifetime of the property. Trust us, it works!
4. Incentives Attract Tenants in Perth.
What is worse, having your property vacant for a month or giving a complimentary week’s free worth of rent? I would say the former rather than the latter. You don’t know how many owners we see hanging out for
5. Give The Property Some Low-Cost Love.
Nothing says, “rent me,” like the smell of fresh paint, new tiles, and carpet. Prospective tenants love walking into a newly renovated property in Perth and feeling like it is brand new and their own. This can be difficult if the property is currently tenanted, but if the tenants are vacating and you are on good terms, they will allow you access. Additionally, the capital investment is a tax benefit, and not only will the new tenants love you, but the neighbours when they come to visit and the potential purchaser when you put it on the market in a few years.
6. A Rental Guarantee from the Developer is Gold.
Often times Western Australian developers with excess completed stock will let out the properties to cover their debt. In this instance, we like to
In other circumstance’s developers will offer you a rental guarantee. This means that regardless of whether the property is let, they will pay you the agreed rental income. Make sure that the full amount of rental income over the course of the agreement is placed into a trust account to ensure that in the event the seller goes into liquidation or even bankruptcy your income stream is not affected.
7. Amateur vs Professional – Real Estate Agents in Perth.
Many investors attempt short cuts in order to minimize agent fees. This is the equivalent of defending yourself in a court or operating on your own ailment. It may seem like a good idea in the short term to save $$ but will cost you dearly in the long run.
You don’t know how many countless times we have encountered people who feel that their knowledge is greater than our team and our own experience in real estate. Some navigate the treacherous waters successfully, but most often their path is wrought with legal exposure and missed an opportunity.
Hopefully the above was helpful, we are here to assist and run a full-service property management company, work towards maximising sellers return on investments and have a fantastic team of industry professionals whose expertise our clients benefit from.
8. Get Professional Advice.
Here’s something I know to be true. I have met more property investors in Perth than you ever will. It’s an undeniable fact that you will gain something (not nothing) from meeting with a professional real estate agent that specialises in leasing domestic rental properties.
I’m a guy worth talking with. If nothing else you will get a better understanding of:
What your Perth apartment, townhouse or home is worth.
I have been appraising property in Perth and throughout the world for the last 20 years. I have seen numerous up and down cycles. Sellers are generally happy in an up-cycle and buyers in a depreciating market. I have not only the qualitative resources but the experience of understanding multiple markets as well as markets within markets. (Did you know there are markets within major capital cities that perform differently from others?)
I pride myself on appraising appropriately. I have always underpromised and overperformed. My clients are generally elated when I achieve a sale price above their expectations. This is achieved by my personal touch with both buyers and sellers, being fair, and offering an energetic approach to real estate. Anyone can learn the law, statutes, or other jargon, but understanding people’s needs and wants is the true nature of our profession.
A realistic expectation of what you can expect in rent from a Perth property.
I never overestimate the rental value of a property. Not only is it dishonest, but a disservice to all involved. We tell you how it is whether or not you want to hear it. Pricing a property appropriately for rent ensures that it rents quickly, the revenue stream continues and that all are happy. Tenants rarely pay more than market value and therefore overpricing a property will only guarantee that it remains on the market with
A Ball-park Number for what Maintenance will Cost for a Perth Rental Property.
General maintenance is part of being an owner of an investment property in Perth. We have owners who are interstate or overseas and have employed us to do everything on their behalf. We organise maintenance, lawn care, bill payment, you name it, we are here to assist. Other owners like to use their own handypeople or even do their own work if qualified. Our property management style is geared to suit our client’s needs and we are happy to help in any way we can and you be as hands-on, or off, as you would like.
Short vs Long Term Rental Agreements: What the Perth Rental Market Looks Like Strategically.
In a depreciating rental market, we advocate entering into a rental agreement for as long as possible to offset the further decline in rental income. Obviously, the opposite is appropriate in an appreciating market. Generally, it depends upon what you are comfortable with and what suits your situation.
Recently, we had an owner in Europe who pays his mortgage on the 15th in Australia ask that we pay his income on the 14th. We generally pay our owners at the end of the month but were happy to accommodate this loyal customer of ours.
There is a BIG Difference Between Tax Minimisation and Tax Avoidance, Especially for Properties in Perth.
Owning a rental property in Perth has many tax benefits. We have clients who are rentvesting, to owning through their SMSF’s to investing as a couple for their children’s university fund. We have a great team of tax professionals who can assist and advise on the best structure for our clients as it is extremely important to set things up correctly, initially.
9. Make an Appointment With Me.
If you have made the leap to read 8 Rules to Minimise Rental Vacancies for Investors in Perth, you can only gain by speaking with me directly. Make an appointment and the only pressure you will feel is which tenants to accept and which ones to avoid.
