Why is it some rentals get snapped up and others take longer to rent. The answer is a simple matter of supply and demand and market competition. You have to compare like with like, but there are still some basics that apply across the board. If other properties in your area are renting faster than yours, these are some factors which may be deterring applicants:
- Rent is too high – you must be objective when setting the rent. If you are asking for more than other properties in the same market, your property must be significantly better.
- There are faults with the property – cleanliness, privacy and security are big factors. Simple things like fresh paint, new carpets, air conditioning and security measures are an investment that will pay dividends in the form of short vacancy times.
- The market doesn’t know the property is available – the majority of tenants search for property via the internet. So access to sites like c1realty.com.au will help put your property in front of more faces. Don’t overlook the value of a ‘For Rent’ sign to attract passing trade.
- The property isn’t marketed properly – There are two basic mistakes many landlords make when marketing their rental property. One relates to the photographs. A photograph of the exterior of the property should always be included. Tenants automatically assume the property must be in a poor state if an exterior shot is not included. All photographs should be bright, clear and of suitable resolution. Make sure the rooms and exterior are tidy when photographed.
The second issue relating to marketing is the inclusion of the address in the listing. This should always be included – unless there is a very good reason not to (and I’ve yet to hear one). Not including an address is frustrating for the tenant and inefficient for the landlord.
Frustrating – because the tenant must make contact about a property that may not be at all suitable for them. So, many don’t bother. Inefficient – because the tenant is unable to do a quick ‘drive-by’ and so make the decision about inspecting.
How to pinpoint the problem
If you are advertising the property but not receiving many enquiries, then the issue is primarily that the market deems the rent too high. A secondary cause may well be poor marketing as discussed above. The public can make quite good comparisons from what they see on the internet – this makes price the main differential.
If you are getting good enquiry and inspections but no applications, then the issue is likely to be a problem with the property. This means that the property looks okay for the price on the internet, but when applicants inspect they don’t see value for money. If you find yourself in this situation, be sure to get feedback from those who inspect. There might be something about the property that might seem okay to you, but it is putting people off.
WHAT CAN YOU DO
Reducing the rent to meet the market is an obvious solution and makes more sense than holding out for the list price. For example take a property listed for $350. Let’s reduce the rent by $10. Over the course of a 12 month lease, that is a ‘loss’ of $520. However, for every week left vacant, the owner is losing $350. You can see the rent reduction is very quickly recovered.
An alternative approach is to offer a rent incentive. If you really believe the property is worth $350, why not offer a week’s free rent, or a retail gift card of $350. Putting this in the headline of the ad text will attract attention and might be just what is needed to secure a tenant. You’ll be surprised how effective it can be.
The worst thing to do is to take no action. You may want $350 per week but if the market is not responding then you are not going to get it. As soon as you start to think “I’ll just wait another week and see how things go” then it is time to take action.
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