For many investors, one of the most stressful times can be when the property is vacant for an extended period, resulting in a loss of income.
Fortunately, there are steps that you can take to minimise long vacancy periods, even when the vacancy rates are high.
Know the vacancy rate and market conditions
As an astute investor, it is important to keep up-to-date with the current rental market and know the vacancy rates, trends and fluctuations. Vacancy rates are expressed as a percentage and is an insightful, high frequency indicator of demand and supply in rental properties. Steady vacancy rates are considered between two and three percent. A low vacancy rate (below two percent) is a landlord market and associated with rising rents and a decline in the time it takes to secure a tenant. A high vacancy rate (above three percent) means there is a large portion of rental properties available, rents fall and there is an increase in the number of days the property is advertised for rent.
Know the current market rental value
When the time comes to advertise and find a tenant, make sure you list the property at a fair market value. It may be tempting to advertise at a higher rate, however, you are likely to receive less interest. To determine the rent, compare similar properties of the same size and in the proximity of your investment property that have been recently rented.
Advertise at the right time
Two to three weeks before the property is available, is generally the best time to advertise. If the property is advertised too early, then your campaign may lose momentum.
Monitor the advertising enquiry
If you are receiving minimal enquiries or a lot of enquiries and inspections with no applications, then this is a sign of an over-priced property or something that the property is lacking.
Pay attention to presentation
The presentation of a property is critical during high vacancy periods as tenants can be more selective. If there is an oversupply of properties on the market and your property becomes vacant (if applicable) it may be time to repaint, update appliances, replace fittings and tidy the outside of the property.
Offer an incentive
Offering an incentive is one way you can help make your property more appealing to prospective tenants. For example, offering one week’s free rent can really help a tenant financially when they are moving.
Consider additional inclusions
Depending on the type of property, you may attract more interest if some appliances are included. A washing machine, dryer, dishwasher, cooling/heating, fridge freezer, free Internet, or the inclusion of garden maintenance.
Strategically plan your tenancy
If possible, avoid the lease expiring during high vacancy periods. Offer a 10-month term instead of a 12-month term.