This recent article posted by www.news.com.au reiterates how important it is in this current climate (note - important to keep your tenants happy in an economic climate!) to make sure your tenants are happy and looked after. Whether you self-manage your rental properties or use a property manager , now is a good time to ask for an update on your property's tenants. Are they well looked after, are there any maintenance issues the property manager may not be aware of, has there been any contact recently?
PROPERTY investors are receiving higher rents but, in a rare twist, vacancy rates are rising in most capital cities.
It's a case of landlords recovering higher costs rather than pocketing profits, say real estate experts, who believe investors should do what they can to keep good tenants.
As house price growth struggles nationally, a new report from the Real Estate Institute of Australia says median weekly rents rose in every city except Darwin in 2010-11.
For a three-bedroom house, Adelaide's rental growth was the strongest, up 6.7 per cent to $320 per week.
It was followed by Sydney (up 5.3 per cent to $400), Melbourne (up 4.6 per cent to $340), Hobart (up 3.1 per cent to $330), Perth (up 2.6 per cent to $390) and Brisbane (up 1.4 per cent to $350).
However, rental vacancies rose in all cities except Brisbane and Perth, indicating that tenants have more housing choices than a year ago.
Vacancy rates are still below the 3 per cent level considered to reflect an oversupply of rental accommodation.
REIA president Pamela Bennett says that it is unusual to see both rents and vacancies rising simultaneously. "Usually when vacancy rates get tight, rents go up," she says. "However, a lot of other things are contributing to the rent. Utilities like water and rates are contributing to the increase." And landlords may have only recently been able to include last year's interest rate rises in their rental agreements, Bennett says.
She says rising vacancy rates may reflect first-home buyers staying out of the market amid uncertainty about interest rates, the economy and politics. "The Y Generation are very well informed and are thinking 'OK, I might stay another year at home'.
"In the rental market, agents will tell you if you have a good tenant who's responsible and paying. Hang on to them. It's a two-way partnership."
University lecturer, author and property investor Peter Koulizos says some landlords are dropping their rents to attract tenants, while many are not moving rents at all.
Koulizos says tenants are setting today's rents, unlike a few years ago when rising migration and international student arrivals gave landlords the upper hand.
His tips to keep a good tenant include:
* Follow up on maintenance issues quickly and put yourself in their shoes.
* Do not increase the rent just because the lease is up for renewal.
Renew the lease well before the previous lease ends. "Approach them 6-8 weeks before it ends, before they have a chance to think about shifting," Koulizos says.
Sydney has Australia's tightest rental vacancy rate at 1.5 per cent, followed by Adelaide (1.8 per cent), Melbourne (2.2 per cent), Brisbane (2.5 per cent), Hobart (2.7 per cent) and Perth (3.5 per cent).
If you have any concerns about the current property investment market or need advise on how a property manager can help minimise risk, give us a call.
One of the important roles property management companies play is that of acting as liaison between the landlord and tenant.
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