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5 Secret Ways to effortlessly avoid pain from Townsville’s Downward Rent Spiral
Make More Money in this Market
Herron Todd White has just released results from the last 5 years including vacancy rates and median rents and it makes for very interesting reading.
Simply put, it means that weekly rents (Yields or $ in your pocket) have declined by up to 25% and Vacancy rates (The average number of days/weeks’ properties take to rent) have increased by about 24 days per year. What was an average $16000 per year return on a 2-bedroom unit can now be as low as $9000 or $10 000 per annum.
This combination can be crippling for investors and yet why is it that some property owners seem unfazed and have continued to realise great yields all through this period. Perhaps it’s that they know something you don’t.
Here are our 5 secrets to make more money in this market:
Zero vacancy means zero losses! Renewing your current lease (even at a slight reduction) avoids exposing yourself to reletting in this market. Along with all those extra costs, advertising, let fees and the like.
2. Have a professional agent with a low vacancy rate.
Engaging an agent who can PROVE a low vacancy rate through this extended period will save you thousands of dollars. It takes great systems and a consistent professional approach to achieve exceptional results in this tough market. If your agent does not have the answers it means YOU WILL PAY in losses.
3. Look after your tenants – Once you have them …. Keep them.
Tenants are the lifeblood of any investment property but even more so on a down market. Act quickly on maintenance requests, get the air cons serviced before Summer, get your agent to send them a Christmas Hamper… Make sure you have an agent that treats them with respect and makes them feel valued.
A happy tenant, stays longer, looks after your property and usually is happy to pay a little more than market rent.
If your property comes vacant get it rented FAST
4. Price – Price your property BELOW those currently on the market. The market is on the way DOWN – Vacant days will KILL your investment.
Don’t be greedy and DO NOT listen to greedy agents who will tell you anything to get your listing and then sit by and wait until you realise the price is too high – look at the graph and see what happens to people who act too slowly. A stupid tenant will not magically appear and rent your property at top dollar. Act EARLY – the trend is downward, the longer you have a “wish price” on your home the more money you will lose.
We are in an economic downturn AND we have an undersupply of people and an oversupply of property. Price your property according to WHAT HAS RENTED not WHAT IS currently advertised!
TIP – if you don’t like the price your agent is suggesting you probably have a good agent! LISTEN.
5. PPP – Make sure your property is well presented and promoted.
Bad photos and poor ads mean no inspections; poor presentation means no applications. Use professional photos and Premiere and Feature Listings to draw attention to your property. All markets cycle and we will return to a rising market soon but by following these tips you can be one of the investors who makes great returns even in a falling market.
At Coral Sea for the 5-year period from August 2011 till August 2016 we have maintained average vacancy rate BELOW 1%!