With
rent increases in Australia’s capital cities experiencing their slowest growth
rate in nearly 20 years and residential vacancies continuing to surge, there’s
no denying tenants are in the driving seat at the moment.
What
can landlords do under these challenging conditions predicted to persist for
some time?
The
cyclical nature of the property market dictates that this current tenants’
market will not last and momentum will eventually shift. But until conditions
change, there are several things landlords can do to maximise rental
opportunities and preserve their investment. Denial, ignorance or blind
optimism are not options. If landlords do not accept the reality of the current
market situation and take positive action, they could end up putting their
investment at risk.
Here
are five key tips for landlords in a tenants’ market:
1.
Be open to negotiation
Landlords
need to be open to negotiation to meet market demands. If a landlord doesn’t
adjust by offering reduced rents or shorter lease contracts, they may expose
themselves to considerable financial loss. Yes, returns will be lower, but a
reduced weekly rental is infinitely preferable to a vacant property. Landlords
should be prepared to negotiate, drop rents and offer more flexible contracts
in order to attract or keep tenants. It’s also worth discussing contracts with
tenants well ahead of the renewal date to ascertain their intentions and
negotiate terms of a new lease.
2.
Offer incentives
Zero
vacancies are the holy grail of property investment and in order to make a
property attractive to a greater pool of prospective tenants or make it more
appealing to current tenants, landlords should be prepared to offer incentives.
Accepting pets, adding extras such as garden maintenance and offering a week’s
free rent are all ways that landlords can incentivise tenants and prospective
tenants.
3.
Treat tenants with respect
A
good landlord will always treat tenants fairly and respectfully, but in the
current tenants’ market, it’s worth going the extra mile. Respond immediately
to any queries, pre-empt maintenance issues, offer unsolicited extras (having
the carpets cleaned or paying for a garden tidy-up) and deal with any requests
for a reduction in rent sympathetically and realistically.
4.
Improve presentation
The
appearance and presentation of a rental property is of paramount importance in
attracting tenants in the current market. Well-designed properties with quality
finishes and added extras like air-conditioning and parking are always going to
be more sought after, and landlords need to think about what the property lacks
and where upgrades and improvements could be done in order to make it more
attractive.
5.
Be creative with the marketing
In
today’s challenging environment, landlords need to implement creative and
far-reaching marketing strategies to promote their property, reach the widest
possible audience and attract interest. All types of communication channels
should be considered. It’s also worth cutting costs by engaging platforms such
as RealRenta. To help manage
your rental property
Not yet a RealRenta
Landlord?
Become a
RealRenta Landlord today and get 50% off the normal subscription fees:
https://mailchi.mp/realrenta/50-deal-2020
Jason Gwerder
Monday, 29 June 2020