Rental comps in area not comparable

Hi, im a long time watcher and new member to this here forum, so hello to all.
My situation is this, I have recently built a new investment house in a heritage area which is medium to high spec/finish.
Unfortunately, all of the data available for rentals in the immediate area is not exactly relevant, as they are mostly 100 year old heritage houses with low spec finishes (and most probably not energy efficient, etc.)
The area is mostly owner occupiers and walking distance to schools, CBD and transport, so I'm betting demand is there,but to date nothing like this has been available.
So far I have been getting big variances in estimations from the real estate agents so I thought id put this to the experienced BrainTrust here;
What would be the best way to get a better idea of what the rental range should be, (and how should i go about it)

 

Go to market based on CMA's at the high end, if the market is willing to pay then great, if not, start lowing your price until you find what the market is willing to pay.

 

I believe that the agents have all done this already, yet they dontdseem to agree onoits worth. The area is unique, in that neighbouring suburbs with similar buildings dont have the same advantages, location wise.

 

Grill the agents that you have asked for rent appraisals - why are they saying $X or $Y?

Are renters more interested in the older buildings due to character? Is a new building the wrong product for the area? In some heritage areas, old character houses sell for more than new/reproduction houses as they are in keeping with what they buyers want in the area.

 

Sometimes if you have something really unique, the only way to find out is to take the property to market. That said, you still want a reasonably solid guide of where to start.

There are some heritage styled modern builds hidden around Ipswich if you know where to find them- I'd say Woodend is probably the best spot to look. You can also add fully renovated heritage homes as somewhat comparable.

 

It's not unusual for agents to disagree. I had a newly renovated house in Perth where the agents quoted at the low end $320 and at the high end $460. That's a massive spread! Out of interest it rented for $440, so all the agents under $400 were way off.

Sometimes you just have to look at what's available from the point of view of the renter and add what you think they might be prepared to pay for yours being nicer/different.

Getting the pricing wrong can be costly though. Even with sharp pricing and 2 rent reductions I have had one place vacant for 12 weeks

 

House is at fitting stage so should be ready in 2 months or so.
Was wondering if putting out an Expression of Interest (EOI) on realestate.co.au, was an option!?

 

There are "not so nice" Queenslanders for rent for $400 but I did see a nicely done, large heritage Queenslander for as much as $900 per week, which did seem a bit excessive.

 

Ultimately it is up to you.

Take into account the range of quotes and pick a figure at the higher end. Be prepared to drop the asking rent if you get little interest in the first fortnight.
Marg

 

agents aren't mind readers or magicians,
just like sales agents, they cant guess exactly what a buyer/renter is willing to pay,
sometimes you get lucky/unlucky

however its their job to know a good and accurate estimate

if there are comparable properties, and the agent gets it wrong by $100 per week, then id say thats a big problem and I would compare their expertise

 

Sounds like you dont know how to use comparables then. If you have extra xyz features over what the comparables have, then its up to you or your PM to know what xyz features are worth in your area.

 

If the house is still not finished then some PMs will be cagey/conservative about what they think it's worth. Although you may tell them it's mid-high spec it may end up with poor execution (think very expensive pink granite with green cupboards) so it's all vague pricing at the moment.
You might need to awkwardly do a rental home open with a "from $xxx pw" but as the owner you can set the amount and suck it and see for 2 weeks. If no one turns up then drop the price.

 

^ this. But if you are trying to estimate then generally in a high income area (say... vaucluse for example) the upgrades will be worth a lot, in a very working class area, much less - extra rent.

 

Broadly speaking if you’re getting enquiry and people attending opens but not applying, it’s a property problem. If you’re not getting any enquiry or people showing up, it’s a price problem.

Of course, the former can also be fixed with price but if sounds like you’ll have to take it to market to get the picture.

- Andrew

 

Update: i posted on facebook and gumtree to see what the response was like. To my surprise i got a few bites which convinced me the price was in the ball park. Im thinking that the response would have been better after the new FY had started, say July August, but im happy with the amount for now.
Next question is how do i fix fair increases on a fixed term contract..any ideas!?

 

Provided the current lease doesn't have a provision stating 'no rent increases', you can increase the rent no less than every 6 months, giving at least 2 months notice, however keep in mind the tenant can dispute it and take it to QCAT, so you must be able to 'justify' it, an example of this would be annual CPI increase. If you can't really justify it, but still want to do it, you have to end the current tenancy and offer them a new tenancy at the new rate. That would be done with a Form 12 Notice to Leave (without grounds) (at least 2 months notice out before expiration of current tenancy end date or simply 2 months notice if periodic), and then offer them a new tenancy at the new rate. If they want to stay they'll sign, if not they'll vacate.

 

Really???
Facebook and Gumtree

Sorry, but you have A LOT more reading to do if that is how you are using those as a guide

(Not saying Facebook or Gumtree can't be used, but both usually result in a "problem tenant/help needed" thread )
PS, get a PM ....

 

There is leglislation regarding leases and rent increases.

Are you self managing? If so, better read up on all the tenancy rules and regulations applicable in your state. Get things wrong and you can find yourself in a world of trouble.
Marg

 

I would start at the high end and see what feedback you get.

You may find people want to pay more for the "norm" in that area, maybe yours is in wrong spot and sticks out ?

Even with comparable, I have found PMs can have huge variations in what you can get