South Brisbane Apartment - What to do?

Hi All,

I have a 1 bedder apartment, reasonable size floor plan, with a balcony, top floor (10th floor) in a building of about 80 apartments. Has a bit of a view, nice layout, has a secure carpark space and very close to facilities like the convention center, south bank, train station etc.

Have owned it since 2012 as an investment property, purchased off the plan and leased back to the developer on a guaranteed rental agreement since. First 3 years lease back to them were on a nice attractive guaranteed rate (carrot dangled and it worked ) But since that agreement expired they have been only offering 12 month renewal contracts and decreasing there lease back $ amount significantly ever since. For reference they use the apartment, along with most of the others in the complex and others around for short term rentals.

It has been pretty much cash positive for the first 3 years and neutral to a slight negative the last 2 years. They have since offered last week another big decrease in monthly rent to us as the 12 month renewal is just about to come up. They claim various reasons for justifying this, most of which are BS and involve comparing our apartments (short term rentals) to long term rentals in the area and the returns/income which go with them. 2 totally different leasing markets.

Just after some opinions on what we should do from people with experience in whats going on in the South Brisbane apartment market, keeping in mind our property and its particulars. Should we sit tight and possibly look at finding a decent property manager in the area and hold onto it? Surely the apartment market will go somewhere north soon... hopefully...

Or look at moving it on now?

 

It's going to take quite some time for the oversupply to sort itself out I think about 5 years at least for this type of product in this location.
I wouldn't be expecting significant rental increases in that time and things could get worse with friends potentially however I think you should chat to some alternative property managers and get their take on it in order to inform your decision you could also have a look and see what sort of price you would get for the property I think you will find that prices may not be so good given what has been built recently.

 

Thanks for that whitecat.

Does anyone have any recommendations of reliable property managers in this area?

 

Why not use real estate website and search for rentals using the map feature and see if the prices are similar to what the on site manager suggested.

sometimes the PMs are "realistic" on their rental price suggestions. they know you may think it's worth xyz / wk but no one would come and inspect. Just wasting time.

sorry if this isn't what you wanted to hear but it's possible too many apartments are being built.

when it comes to apartments since a lot are similar they can be viewed as "standardised product" making the market competitive. meaning it doesn't take many competitors to significantly reduce your economic profit.