Perth Rental Property Market.
The current Perth property market appears to be not just slowing down but showing signs of the market reaching a point of stagnation. Reiwa data suggests that the Perth property market is stabilising in accordance with their report. However other data suggests a different opinion.
This only leaves the investor confused and wondering what is going to happen to their investment. As many of you have experienced, the good times are definitely over, with some rental properties taking as much as 8 weeks before a tenant is found and as much as 6 months before an offer is placed on a property.
This is not only a sign of the times, but it calls for good strategic measures in order to survive this current storm.
In saying this, there is a phenomenon called the ‘perfect storm’. This works on the notion that although hardship is starring us in the face and it seems like we can not get up, the perfect storm creates opportunities which can position us and drive us to be in better shape than before. We all know every storm does not last forever, however those who used the storm to reposition themselves will come out better and stronger than before.
We would encourage all our clients to look at their investment portfolio and reposition themselves in order to be in a better position once the storm is over.
Tips for repositioning your investment portfolio.
Properties that have high costs and low returns: This may be due to the age of the property and or the fact that your property manager has not looked after it and therefore items have broken down before its lifetime. It may be time to cut your loses and invest in something newer.
Troublesome properties: Properties that always seem to attract high maintenance tenants and leaves you with a maintenance bill after each tenancy. It may be time to look at repositioning your investment geographically.
Property Managers: Your investment property is only as good as the person who is managing the property. If your property manager is not looking after it with your best interest in mind and protecting your asset, then it may be time to reposition your managing agents.
How is the rental market?
This is a question which many land lords have been asking us over the past few months.
We currently have just over 10,000 properties on the rental market in accordance with the Reiwa figures and a vacancy rate of 6% and increasing.
This not only suggest that the rental market has become a tenants market, but it also lets us know that the rental return is not what it used to be either. Many of our clients have experienced this by either giving a rent reduction and or leasing their property at lower rental prices.
Todays market has become a game of strategy and good decision making. Land lords who are wanting to maintain a healthy return will experience a vacant property for a longer period of time which results in a rent reduction eventually in order to find a suitable tenant. Wise landlords who have a good understanding of the market, will always play the game by strategically retaining good tenants.
How to retain good tenants in todays market? The answer is composed of several suggestions:
- Don’t increase rental prices by large, unreasonable amounts, incremental increases are more negotiable
- Tend to maintenance of the property in a timely manner
- Reward good tenants if and where possible
- Negotiate a longer lease term with minimal impact on your financial goals
