Perth landlords have been urged to take a more realistic approach to setting rents during 2015 with the number of properties available for rent jumping by nearly three-fold over the past two years.
The market reality is that record-low interest rates were causing a flight of renters into the first home buyers’ market.
Because rents have increased so strongly over the past four years in Perth, it is nearly as cheap for renters to buy a home taking into account current very low interest rates.
That is why the latest REIWA figures show the number of properties listed for rent in Perth has now jumped to 6,200 which compares to just 2,100 during 2012 – a rise of more than 4,100 properties available for rent.
Landlords now leasing their property have to compete against over 4,100 other landlords compared to this time two years ago – plus the pool of potential tenants has shrunk.
With more rental properties available for rent, tenants now have a greater choice and as a result, landlords have to set competitive rents.
There is a real danger that some Perth landlords who will not adjust their rents will find that they cannot secure a tenant because they have overreached the market – resulting in long vacancy rates and loss of income.
In a growing number of cases where there is an oversupply of rental properties, landlords have had to drop their rents by 10 per cent to secure a good tenant.
The property market is constantly changing and landlords need to monitor current vacancy rates in their local area to determine the correct market rent for their property.
A professional property management company will be able to advise you on current market rents as they are renting homes every day of the week.
Despite the higher number of properties listed for rent, we are still finding strong demand for homes which have a weekly rent of $500 or below which are in a near-city location and well presented.
Location and the presentation of properties are now key issues in the current rental market with prospective tenants gravitating towards well-presented homes that are walking distance to work or close social infrastructure such as transport, shops and cafés.
Perth property investors with existing tenants should ensure that they maintain their properties to a high standard and act quickly to address any concerns they tenant may have. One of the major reasons why tenants vacate a rental property is that they are unhappy with the service the landlord is providing with issues such as maintenance and repairs taking too long to be addressed. This strategy will help to avoid unnecessary vacancy rates and ensure you achieve maximum cash flow.
Limnios Property Group has specialised in the inner-city Perth property market for over 40 years. During this period, Limnios Property Group has emerged as one of the most progressive and innovative real estate companies assisting both developers and property investors to achieve their goals through highly professional advice backed by an unparalleled depth of experience in the inner-city market.