The life of a landlord is never an easy one. You invest a lot of time and effort into finding the right property, weekends and time off getting it ready for tenants as well, and then there is ongoing maintenance after they move in. The last thing you need is an empty property that chips away at your investment and all that time and money.
A vacant rental property can be a nightmare for real estate investors, right up there with tenants from hell and giant cockroach infestations. A property earning no income will still have all the expenses, such as interest repayments, council rates and land tax, that drains cash from your financial reserves.
Figures released by SQM Research this week have revealed the number of residential vacancies remained steady across the nation in July 2015, with a vacancy rate of 2.4%, slightly up from June. Managing Director of SQM Research, Louis Christopher, said “The Rental market is on balance slightly in favour of tenants at this point in time, though of course, each city tells its own story.”
So how do you stop your investment property from becoming an empty, wealth-draining shell? Setting the right weekly rental price is the key. Each week that a property sits vacant is cutting an investor’s annual rental income by almost 2 per cent, so waiting for an extra $10 or $20 a week is probably pointless. Always remember that a property earning a little less cash than hoped for is much better than one earning nothing at all.
Research rents in the local area and speak to your local Fisk and Nagle Property Manager to get a feel for fair prices. Don’t be in a hurry to raise the rent every year if you have a good, stable tenant. They are worth something to you. Lower mortgage interest rates have been putting money in investors’ pockets, and the likelihood of interest rate rises any time soon are slim. The easiest time to justify a rent rise is when interest rates are also rising.
Presentation is important in attracting and holding onto good tenants. An outdoors clean-up, a coat of paint or adding a few extras like a security screen or some garden plants can work wonders.
Maintenance problems need to be fixed quickly and that’s where having a professional property manager comes into its own. Not only will it keep tenants onside, but also reduce the risk of legal problems if something goes wrong because you were slow in responding to maintenance requests.
Tracey & Leonie in Fisk and Nagle’s Cooma office can take the heartache out of running your investment, helping to set rents and dealing with the tenants. Give them the headache so you can enjoy the returns.
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