The Four Tips for Ensuring You Find a Tenant for Your Investment Property
The news of rising vacancy rates may leave you feeling worried. But with these tips, you’ll make sure you’re not one of the investors who feel the pinch.
When you invest for yield, you have a lot of issues to consider. Chief among these is the need to find reliable tenants for your property, then other issues will extend from this.
You must pour resources into maintaining the property, as well as marketing it to potential tenants.
Of course, you also have to contend with the problems that a vacant property causes.
Every month that a property sits vacant is a month where it doesn’t generate any income. This can cause major cash flow issues for an investor, especially if they have several vacant properties in their portfolios.
Those vacancies could make it harder to both pay your existing loans and finance investment into a new property.
Simply put, you need to ensure you have a tenant in your property.
We’re going to look at some of the ways that you can do that. But first, let’s look at what vacancy rates in Australia look like right now.
The State of Vacancy Rates in 2019
The good news here is that national vacancy rates haven’t changed much over the past year. In fact, there’s only been a 0.1% increase between October 2018 and October 2019:
This suggests that the rental market is no more difficult now than it was a year ago.
However, this doesn’t tell the full story. While national rates have increased slightly, there are bigger increases in individual cities.
Take Sydney as an example. The vacancy rate in that city has risen by 0.3% in that time period. This, coupled with building work, means that there are now 2,933 more vacant properties in the city.
Other cities tell similar tales. Melbourne saw a vacancy rate increase of 0.4%, which equates to 2,562 more vacant properties. Hobart and Canberra have also seen increases in the vacancy rate.
If you live in any of these cities, you may find it harder to attract tenants than ever before.
That’s where this article aims to help you. What follows are the four tips for attracting tenants so that you don’t have to worry about vacancies.
Tip #1 – Always Keep Your Property Presentable
You will often hear real estate agents talk about curb appeal. First impressions count a lot when trying to rent out a property. If yours doesn’t look the part from the outside, you’re creating a negative impression before a viewer walks through the door.
Your goal is to make the property as presentable as possible. That means dealing with all of the little maintenance issues that you may have put off. For example, make sure that you tend to the lawn and apply fresh coats of paint to doors, walls, and windowsills. You may even contemplate more extensive cosmetic changes, such as installing new carpets.
These small changes require an upfront investment. However, they also show potential tenants that this is a property that’s cared for. As a result, they come away with a better impression of both the property and its owner.
Tip #2 – Use Great Photos in Your Listings
The photos that you post with your listing are your potential tenants’ first view of the property. Ultimately, it’s those photos, coupled with what you tell them in the listing that determines if they’ll book a viewing.
Now, take a look at the photos that you’re currently using. Ask yourself if they would attract you enough to go and view the property yourself.
If you say “no”, then it’s likely that a lot of potential tenants feel the same way. There’s no way to know just how many potential viewings you’re going to lose for having bad photos on a listing. However, you can guarantee that a property that looks great in pictures will attract more interest.
Stage your rooms and hire a professional photographer to take attractive pictures.
Tip #3 – Know Everything About the Local Area
Remember that it’s not just the property that you’re trying to sell to the tenant. You also have to consider the location itself. After all, the tenant will spend an extended amount of time living in the location. They need to know that it offers everything that they need before they commit to a tenancy.
Don’t leave the research in the hands of the tenant.
Find out as much about the local area as you can. Create lists of local schools, parks, public transport, and other amenities. Compile this into a marketing booklet that you can present to potential tenants. Hopefully, you’ll answer some of their questions quickly, which brings them one step closer to becoming your tenant.
Tip #4 – Don’t Get Greedy
If you’re asking for more than what people expect to pay in rent, you’re going to struggle to fill your vacancy.
Now, getting the rent right is a complicated task. You need to research similar properties in the area and find out what their investors charge. You also have to consider what your property does and doesn’t offer in comparison to these competitors.
Finding the right price is essentially a balancing act. The key is that you don’t get greedy and ask for more than your market’s willing to pay.
Use the following as your starting point:
Those are the average rents for both houses and units in the Australian capital cities for October 2019. If you’re asking for a lot more than the numbers you see in this chart, you need to feel sure that the property justifies the higher rent.
Find the Right Tenants for Your Property
With these four tips, you stand a better chance of finding a tenant for your investment property. This means you will get cash flowing into your account, which you can use to grow your portfolio.
The key is that you have a property that’s worth renting in the first place.
That’s where Freedom Property Investors come in. We specialise in helping investors find high-performance properties that generate strong rental yields.
Would you like to find out more?
If so, make sure you do the following:
- Schedule a one-on-one strategy session with us.
- Attend one of our live events.
- Watch our web class.