‘Sydney vacancies at a record high’…
‘Rent crisis for landlords worsens’…
‘Property panic as rents plunge’…
If there’s one thing that’s hard to swallow for Sydney landlords at the moment, it’s the news headlines.
And not to any surprise, with an oversupply of rental properties the cause of concern for many who are trying to get a good return in a softening market – one which is experiencing the largest decline since 2005 according to recent data.
But is it really all doom and gloom?
As with any property cycle, Sydney is currently experiencing a post-boom correction and ‘cooling off’ following a prolonged period of steady increases in housing and rent prices. But beyond what the bleak headlines suggest, there are still plenty of opportunities for landlords to secure a tenant and make gains from the current market.
All it takes it a slightly different approach, which we’ve outlined below.
Temper your expectations
With an oversupply in rental properties providing greater choice for tenants, it pays to be competitive as a landlord. Take our 26-week analogy as an example;
You’re looking for a tenant for a 26-week rental period but don’t want to lower your current yield of $500 per week. Your rental is empty for two weeks until you manage to sign a tenant, but for a 24 week period now – totalling $12,000.
You’re looking for a tenant and slightly lower your rent to $480 per week for a market competitive offer. You manage to attract and sign a tenant instantly, for a period of
26 weeks – totalling $12480.
Which makes more mathematical sense? While it may initially seem like you’re ‘losing out’ by lowering your rent, you could actually be losing more if your rental property sits empty.
Signing that tenant you want may require slight negotiation; for instance, matching their request for the first week free of rent in the tenancy agreement. Remember that by refusing to compromise or consistently knocking back offers, you could be suspending valuable income – and possibly for even longer than expected.
Want more advice about your rental property? Get in touch with an experienced Property Manager at Prudential Real Estate today.
Call (02) 4628 0033 or email [email protected].