Future-proofing your rental
2020 has proved something of an annus horribilis for many strata property investors.
The twin impacts of a global pandemic in tandem with state wide shut downs and what is rapidly shaping up to be a global recession, has seen even the most optimistic of investors struggling to find a silver lining.
Data from CoreLogic shows that across the country apartment rents are falling, with capital cities dropping 3.5 per cent since the end of March. The CBD apartment sector is also suffering from double-digital vacancy rates.
In an article that first appeared in The Australian newspaper, Richard Wakelin from Wakelin Property Advisory, says the issue has been compounded because the right to end out-of-contract tenancies has effectively been frozen across the country since the end of March, with the only exception being the Northern Territory.
While eviction restrictions are due to end in Queensland at the end of this month, there will be no relief elsewhere until either the end of the year (Tasmania), end of January (the ACT) or the end of March 2021 (Victoria, Western Australia and South Australia). New South Wales restrictions were originally due to end on 15 October 2020 but have now been extended until 26 March 2021.
But the news isn’t all bad.
Wakelin says he is confident that long-term trends for the population will lead to a rental market rebound. It will turn around, he says, but only if landlords are patient and prepared to do their bit to ease the burden.
“They cannot be passive. Even with a normalisation of leasing rules, competition for tenants will be fierce into 2021. Landlords who poorly maintain properties, fail to periodically refurbish and upgrade appliances to reflect reasonable tenant expectations and are tardy to respond to tenant communications will struggle.”
Lost rent, particularly when you rely on rental income to pay the mortgage, can add up the longer the unit is vacant.
Yet there are many things landlords can do to lessen the chances of their investment strata property sitting empty for long periods.
Ensuring your property is well maintained will make it a more attractive home to prospective residents. Not only will it safeguard the long-term capital value of your investment, maintenance issues can be attended to as the need arises, rather than one larger outlay.
Use the opportunity while your property is empty to take care of any small interior or exterior maintenance issues you may have been putting off.
No one likes spending money when finances get tough, but loosening the belt a little to update the appliances and amenities in your rental could pay big dividends over the longer term. A modern kitchen with stainless steel appliances, adequate storage and bench space will capture the attention of the most likely decision maker.
With so much choice, savvy tenants are looking to snap up apartments that have the latest in labour saving devices or home cooling and heating options, with dishwashers and air conditioners now considered everyday essentials.
Quality window dressings, good cross ventilation and natural light also have a big impact on the appeal of the property as can giving walls a fresh lick of paint, replacing tired carpets and cleaning and re-sealing the kitchen and bathroom grouting should help improve the demand for your property.
As with apartment sales, attractive advertisements go a long way to increase your chances of securing a quality tenant and renting an apartment quickly.
If your property is currently sitting empty, spend the time styling it then get professional photos taken that can be re-used every time there is tenant turnover. Professional photos are much more appealing for renters, and being prepared ahead of time prevents you from having to enter the unit when tenants are living there.
Take the time to identify what features tenants are likely to be most drawn to in your property and make sure you have good quality photos to highlight them.
Know your market
Rental prices can be greatly impacted by changes to local demand and supply. For this reason, it is critical that investors keep themselves informed on what is happening in their local market to ensure your property meets rental price expectations.
While underselling your rental property could cost you in the long run, you also want to avoid the chance of alienating potential tenants by over-charging. Consider speaking to property management experts in your area to get a true indicator of where the rental value of your property actually sits.