Rookie property investors need to take an even more selective approach to finding a rental property during 2016 due to the surging number of rental properties for lease in many areas.
The latest REIWA figures show that there are now 9,582 vacant rental properties compared to 6,293 for this time last year - a rise of more than 3,000.
The number of properties available for rent in Perth is surging due to record-low interest rates that in turn are causing a flight of renters into the first home buyers’ market. There also has been a building boom that has substantially increased the supply of new homes during a time of slowdown in population growth.
This means that a first-time investor who buys average property in an average Perth suburb will struggle to find a good tenant and will be faced with cutting rent to secure one.
In contrast, there are still pockets in the Perth rental market that are relatively under-supplied and rents have held up despite the overall downward trend in rental prices over the past year.
These hidden gems are located in selected areas of Perth where there is strong population growth that is outpacing the supply of new homes.
Existing landlords also face a challenging year in the Perth property market since they need to be keenly focused on the price they set their weekly rent at when a tenant vacates their property.
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 will continue to keep existing rents at the same level, only to find they cannot secure a tenant because they have overreached the market.
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 them on current market rents since they are renting homes every day of the week.
Despite the higher number of properties listed for rent, the Investwise property management division is still finding huge demand for homes with a weekly rent of $450 or below.
Daniel McQuillan has held senior positions in the property and financial services sector for over a decade. During that time he has gained professional qualifications and a wealth of experience that has enabled him to personally build a very successful property portfolio based on a targeted plan. In 2011, he established Investwise so he could utilise these skills to help other people create wealth through similarly devising a personal investment model that best suited their personal circumstances. As a result of this targeted and personal approach to property investment, Investwise is now one of the fastest growing property investment advisory services in Western Australia.
Further information can be found at www.investwise.net.au.