Ride out market slowdown
Although rent prices across the State have been on a downward trajectory the past couple of years, the rate of decline has begun to slow in recent months — a pleasing sign for the market.
However, for as long as listing stock in the rental sector remains above the long-term average, rent prices will stay relatively subdued.
The good news for property investors is real estate is cyclical in nature. Although landlords don’t currently enjoy the dominance they experienced during the boom period, property investment is still a smart decision. Interest rates on borrowings continue to sit at record low levels, mitigating any short-term financial discomfort you might normally experience.
When pricing your property and preparing it for lease, it is important to listen to the advice of your property manager.
Tenants are out there. The very fact leasing activity in Perth was up 23 per cent in December compared with December, 2015 proves just how active they are.
Be sure your property appeals to the widest range of tenants possible because there are lots of competition out there, with (at last count) 10,476 listings for rent in Perth.
Speak to your property manager about the features and extras tenants are drawn to.
If you have a tenant leasing your rental, you should make an effort to retain them.
Nowadays, if your tenant requests a reduction, you would be wise to negotiate with them.
Less rent per week is better than having a long vacancy period with no rental income. It is also advisable to be flexible with the conditions you put on your rental.
For example, not allowing tenants who own a pet to rent your property can deter people who are otherwise interested.
You’d be better off considering tenants with pets on a case-bycase basis, secure in the knowledge the bond and pet bond (and landlord insurance) will be there to cover any damage.
With signs emerging the rental market has begun to stabilise, I believe 2017 will be the year of opportunity for current and prospective investors.
Compared with investment markets on the east coast, yields in Perth are more appealing and property values have held up comparatively well given the broader economic conditions in WA. If you own an investment property, I advise you to ride out this temporary bump in the market.