Rental prices Perth

I have a place in Cloverdale that has been on the market for rent for over 6 weeks. Previous rent was $440 per week. There is no interest at $390 per week. The agent called some contacts at another agency and without inspecting the property they advised $320 per week!

That seems rather low

To give you some idea, there is a house in the area listed for rent at $320 per week. In my opinion it is not comparable to mine.

http://www.realestate.com.au/property-house-wa-cloverdale-411519655

I was thinking maybe $360 or $370. There is something around the corner for $365 which I don't like as much as mine.

http://www.realestate.com.au/property-house-wa-cloverdale-414763859

I don't have a link because the property has been taken down for a week then it will be relaunched at $360 or $370. However, here are some photos for comparison. I know the colours are a bit weird, but it is neat and tidy and in good condition.



Update: while I have been writing this post my investment partner spoke to some more agents who suggested relisting at $350 per week. Ouch!

 

Do you allow pets? That could give you an edge as so many don't.

 

That's a good thought. I would consider a cat or other pets besides dogs. I have had two tenants previously with dogs and both did extensive damage to the property they were renting. I will reconsider the wording of the ad when the property is relaunched.

 

Yep I definitely agree with this.

 

20% drop in rent. That is huge!

 

It is. The problem is the number of places on the market in the area. If I do a re.com.au search for 3 bedders in Cloverdale, Kewdale and Belmont, there are 92 properties. That is a lot to compete with!

 

Ouch for you - I hope you don't have to go lower than $350. Thankfully for the moment I'm ok but I dreading every lease renewal.
As Jess suggested, I'd say 'pets negotiable' that encourages people with pets to apply and you can vet what type of pet you might consider - my tenants pet snake is an awesome pet - he came with permits to keep and everything.

 

Thanks all. That's some good advice right there!

In the meantime, I am sending my investment partner to some home opens of comparable properties to see if anyone is actually turning up and to get a feel for pricing. At this stage it is looking to be $350 or $360 pw. If so, that's a reduction of $80-$90 per week! That's the most I have ever had to discount a property to find a tenant.

 

Well, preliminary indications are that the rental market in the area is very flat. My investment partner reporting live from current home opens. Property 1, $380 per week, very poor condition, no people turned up for the home open. Property 2, $330 per week, not horrid but not flash, no people turned up for the home open.

 

final updates before I call it a night: Property 3 - 3x1, $340 pw, certainly not neat and tidy, one couple for the inspection. Property 4 - 3x1, $385 pw, seems ok, one person.

 

Probably only going to get worse with all the apartments that are coming up around the area.

 

The property manage tells me the market is bad. The only thing to attract the tenant is to reduce the price.

 

Not many three bedders in the apartment market, so I'm not sure I will be competing with them. I would not like to have a 1 or 2 bedder though.

 

May not be correct if it is already priced competitively. Our limited market research on one day and 4 inspections indicates that even the cheap properties are not attracting renters.

 

I have been told there are more than 2000 houses/units on the market comparing to 1 yrs ago.
It is oversupplied.

 

They're still gonna suck away potential customers who are tossing up between a 3 bedder house and 2 bed apartments that may be in a more convenient location.

 

6 weeks without a bite. I would look at starting at $350 and prepare to reduce to around the $300 mark in this market. I have a similar but probably slightly worse condition rental signed again at $380. Have a new 3x2 coming onto the market and could be looking to go as low as $400 if I cant find any interest. Have been testing the water in the mid-high 4's while waiting for completion and not a single bite.
Tough times indeed but this is why we prepare for this time of the cycle.

 

I understand. Yes, I am prepared for this. Still, I would rather find a tenant than leave a house empty if there is something I can do about it. The property has been taken off the web sites and will be relaunched next week with a new price, new photos and an amended description. We'll see if that makes any difference.

 

You may try to rent individual room to individual person for sharing the house

Lots of people are willing to team up to rent for a couple of rooms.

 

My tenants picked up the keys today to my new IP.
First advertised at $450 then leased at $400 after 6 weeks.
Quiet times this year