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No enquiry to my listed rental property

Discussion in 'Property Management' started by Jane, 10th Jul, 2016.

  1. Jane

    Jane New Member

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    My IP has been occupied for the last 6 years as a fully furnished property in Rockingham, WA . Due to the current economic situation in Perth, we already dropped the weekly rental by 5% compared to what the current outgoing tenants are paying. It is similar or lower prices compared to other listed rental properties. We have it listed in realestate.com.au for 4 weeks but receive no enquiry at all so far. We notice other rental properties are vacant for a few months. We are not sure what to do in this situation. It looks like both sale and rental markets are bad in our area right now.
    Do you have any advice for us. Thank you.
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I would reduce rent to the point that it's attractive - better to have someone than no-one (in most cases!)
    This is the case all around Perth right now, and 5% is not much of a reduction compared to what many are having to do. I've just dropped mine 10% and that's just to start.
     
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  3. Jane

    Jane New Member

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    Thanks Jess for your advice ☺
     
  4. Arnel

    Arnel Well-Known Member

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    You might want to consider the following
    Allowing pets
    Allowing smoking
    Collaborating with government support systems (single mothers) etc

    It's a tough market!

    Good luck :)
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I agree with allowing pets, but strongly disagree with allowing smoking. Smoke damage inside a property can be very expensive to fix - repaint, recarpet - better off waiting a couple of months or so for a tenant.
     
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  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Sounds like you need to reduce the asking price by a fair bit.

    I agree with Jess - better to get someone in now that's paying something rather than letting it possibly sit vacant for months.

    Allowing pets is a good option - it generally lands longer term tenants too (in my experience).

    Best of luck!

    Cheers

    Jamie
     
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  7. Fielding

    Fielding Well-Known Member

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    I agree with Jess, I would lower the rent to make it more appealing.
    You could also offer the first weeks rent free to any new tenant. Allowing pets I would keep as last resort. I wouldn't allow smoking, this would just create other problems later down the track.
     
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  8. Jane

    Jane New Member

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    Thanks everyone for your advice. Actually, we already allowed pets in the listing.
    I'll lower the rental price and offer 1 week rent free.
     
  9. JacM

    JacM VIC Buyer's Agent Business Member

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    Ensure the allowing of pets is really obvious in the writeup, and perhaps try to include pics showing the yard space and fencing that will accommodate the pets.
     
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  10. wylie

    wylie Moderator Staff Member

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    We dropped from $615 to $500 to get a tenant in Balmoral in Brisbane just over twelve months ago. That really hurt the weekly cashflow, and we've only just increased to $515. We had allowed them to move with just two weeks' notice when their own house sold. We could have insisted they pay rent until we found a replacement, but they had been through a lot with a child with cancer and I was happy to make their move as easy as we could. They didn't need stress, and it is only money after all.

    What we don't earn, we don't pay tax on, but it did hurt the cashflow.

    We lowered the rent weekly until it got to $500. Other similar houses were lowering the rent like we were. Some were offering one week free rent, and others holding out for the higher rent.

    In all my years of being a landlord, I've only ever dropped rents at change of tenants once before (maybe twice). And those drops would have been $10 a week drop. I'd never seen this before, needing to drop such a lot.

    The agent we put it with didn't like the "one week free" as much as lowering the rent. I don't recall the reasons, but I guess one reason is that we charge $500 and we come up when people put an upper limit of $500 in the search engine. If we charge $510 but offer a week free, anyone putting an upper limit of $500 will not even look at our house, even though with a free week, they technically are paying $500 per week.
     
  11. Lil Skater

    Lil Skater Well-Known Member Business Member

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    I've done this a couple of times, of course haven't tested the WA market...

    Reduce the price dramatically for the first 3/6 months, and then increase up to what most comparable properties are at.

    Ie. Similar properties are $650pw now, drop to $600pw for first 3 months and then up to $650pw after the initial 3 months - all written on the ad and in the lease.

    Cost is similar to one weeks rent free, BUT unlike the rent free you get to advertise in a lower price bracket and tenants automatically think they're saving more money. Also worth noting that a lot of tenants don't actually read the ad at all, so most won't even notice one weeks rent free.

    Oh, and also don't ever allow smoking. All properties "allow" smoking outside, but allowing it could be seen as an open invitation to smoke inside. Causes a substantial amount of damage and costs a hell of a lot to fix if you have a chain smoker.
     
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  12. Arun Chachad

    Arun Chachad New Member

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    I started off with my brand new IP second lot from the beach in Halls Head at $450...after two months I could secure a tenant at $360, that's how bad it is.
     
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  13. Xenia

    Xenia Adelaide Property Manager Business Member

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    The market is similar everywhere.

    I agree with reduce price and allow pets to increase the market.
    I personally would never allow smoking in a property.

    People who smoke will smoke anyway, it's a drug addiction that requires no ones permission unfortunately. However I would not advertise that you are ok with this because tenants need to be held accountable to any damage caused to the property by cigarette smoke so it needs to be stipulated in the lease that it is not allowed.
     
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  14. Scaphella

    Scaphella Member

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    I am about to rent a place of mine out in Perth, first home open is on the 27th of August, when would one suggest I start advertising? I thought the sooner the better in this market however the PM says if it's too early people will lose interest...

    Any opinions on this?
     
  15. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Again, not knowing the Perth market. I wouldn't normally advertise a property without an inspection within the week.

    The first week is the most important for advertising in my opinion, so I would hold off until the 23rd or 24th.