Has Perth got favourable rental conditions?
A report from Domain certainly thinks so- with property rental prices continuing to plummet, primarily driven by over supply, certainly does not help the current market for landlords & investors. The latest vacancy rate of 6.6% is certainly an indication that the rental market is facing a very tough season.
Whilst there are a large number of properties on the rental market, this does not mean that your investment or rental property needs to suffer. Renters are looking for convenient comforts at the right price. Therefore, as long as you are realistic with your property and where it fits on the market and what it is competing with, then your property should perform at a reasonable level.
What should I do to survive in the current market?
We are suggesting to all our clients that unrealistic high rents are a definite deterrent as to why a property may not lease in a timely manner and or tenants not renewing a lease. An understanding that the current market price of your property is not an indication that your property is underperforming or under priced, it is a mere reflection of what renters are willing to pay at the time. We have come across some investors and owners who take the market personally and emotionally react to the rental price in a negative manner. There must be an understanding that the current demand within the rental market is what sets the price, and at the moment there is very little demand due to oversupply, resulting in low rental returns.
What steps must I take?
Some investors and owners are asking the right questions in order to survive today’s market. What must I do to survive this current storm and how do I position myself for a greater return when the market turns?
Both of these questions are great questions to ask and normally asked by the experienced investor or owner, as it deals with the current issues and allows you to plan for the result. Whilst most investors and owners are focused on the outcome, it is those who understand the process that will have the greatest rewards, as we cannot change the market only the market can do that, however we can change individuals’ outcomes by focusing on the process.
Therefore we would suggest that this may be a good time to make sure that certain aspects of the property are well maintained, replacing old items and or renovating certain areas. This will allow for a greater return when the demand increases. We have seen this too often, where investors and owners wait for the market to turn and when it does they are still getting low rent. Many fail to understand that you are competing with another similar property and if the owner or investor took time to improve the property then at the right time they may get a higher rent because the property offers more.
What is new
Cortes Management Group are pleased to introduce the team at Swan River Finance for an added service offering to our existing and prospective clients. The team at Swan River Finance compliment the high level, professional and consistent service levels you have come to expect from Cortes Management Group and this partnership comes as a result of a continued desire to ensure our clients are getting the absolute best possible advice with regards to all aspects of your property portfolio.
We hope that this will inspire you to end the year with a well planned strategy for 2017, in the mean time we wish you the very best for reminder of this quater.