Ride out mar­ket slow­down

Pilbara News - - Property - Hayden Groves Hayden Groves is the pres­i­dent of the Real Es­tate In­sti­tute of Western Aus­tralia.

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.

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