Vacancy can have the biggest impact on property returns.
In this article, we share tips on how you can minimise your vacancy rates and lease faster when your renter gives notice.
Vacancy rates in Australia currently sit at 2.2%, with major cities like Sydney and Brisbane experiencing particularly high vacancy rates, at 2.8 and 2.9% respectively.
Vacancy represents a considerable cost for property owners, with each week of vacancy costing owners 2% of potential yearly gross rent. However, a few simple early actions can help reduce the time your property is left on the market vacant and therefore maximise potential property income.
The best way to minimise vacancy rates is to keep your tenants. This may be as simple as completing repair requests on time, adjusting the rent by a reasonable amount and frequency. For self managing owners this might mean getting to know them and rewarding tenants for long-term rental periods with upgrades like a dishwasher. In addition, although it is natural for rental fees to fluctuate, in many cases, raising rents quickly may lead to higher vacancy rates, and end up costing more than if the owner were to forgo the price increase.
In most cases, tenants must give a minimum of 2 weeks’ notice before the end of a fixed-term lease. It is only after this that the owner is able show the property to prospective tenants as well as advertise, however the tenant must be given “reasonable” notice prior to owners or agents entering the house.
Understanding how and where to advertise is also key in reducing vacancy rates. For example, for listings on main streets or other areas with high foot traffic, an advertisement outside the property may be all that is needed to drive high rates of viewings. However, for properties that don’t have this advantage, money invested in listings on rental websites, magazines etc. can be effective in driving traffic, often saving owners from money lost in longer turn-around rates.
Open house viewings
When hosting a viewing, considering the following practices will help in securing a renter as quickly as possible: Make sure the place is clean! If the viewing takes place before the tenant moves out, give the tenant sufficient notice and offer to pay for cleaning. Prepare necessary documents. In some cases, particularly for shorter rental terms, prospective renters may choose to sign a lease on the day. Make sure to have any contracts or forms ready, although owner approval is necessary. Collect names and contact details. If no applications are submitted on the day, follow-up is particularly crucial. Be sure to send out follow-up emails in the few days following the viewing. Remembering what features of the house prospective tenants are interested can help tailor how you follow-up.
If you have multiple applications, be sure to choose the applicant that best suits the owner’s needs. Recent years have seen volatile rent prices, so there has been a trend for owners and agents to prefer shorter-term contracts to allow for rent increases. However, long term contracts offer a much more reliable ability to generate revenue, minimizing vacancy rates, which is often worth the trade-off. Understanding these factors is critical in getting the most out of a rental property.
Once a tenant is chosen, it is important that all paperwork is pursued as quickly as possible, ensuring a fast tenant turn-around. This includes signing the rental contract (with the owner’s approval if being prepared by an agent) and processing the holding deposit.
About Snug Match
Snug Match is an online service that matches the right renters with the right owners. The easy to use solution empowers you to list a property, receive applications, complete tenancy checks, process a holding deposit and much more.
Reduce friction Snug rolls multiple rental applications into one easy service instead of frustrating forms and piles of paper.
Save time Time is money and vacancy is costly, Snug helps owners and agents lease properties faster.
Better choice Snug Match uses technology to suggest your best tenant based on market conditions, owner preferences and renter reputation, giving tenants and owners a compatibility score, creating the best matches.