Struggling to find tenants

We've recently finished our agreement with an out of area PM after months of struggling to find tenants and looking for a new local PM (and tenants) and have donme some recent work on the property to update it, no tenants also means dropping out there regularly to clean, weed, mow, clear mail etc and that's no longer a tax deduction either

Having a look on www.realestate.com.au there's 105 rentals available in the suburb and 252 total results if you include nearby suburbs.

There are also a few offering a weeks free rent and it seems there are a few vacancies

The problem for us now is finding a (good) local PM and a tenant

 

Cut the rent and/or allow pets.

 

When my property was having trouble finding a tenant I ran an adwords (Google ad) campaign to get some extra leads by showing a text ad to people who searched for (suburb) rental or similiar words. Ended up costing about $200 over 2 weeks, for 150 extra clicks and 4 calls to my agent- only took one of these to secure a tenant. Whacked the cost onto my tax return as advertising costs.

How google ads look (PC media link): Using Google ads to attract tenants

 

Local PM won't make any difference, as long as they're showing it regularly. I manage out of area properties and will still show them 3x per week, its just what needs to be done to land quality candidates promptly.

105 online in a suburb is a bloody lot though. You need to compete against that by being cheaper or being better (and having an agent who gives a damn will certainly help).

Noticed the 6030 postcode on your link, I'm happy to share the PM I use in that area for my own properties if you want a 2nd opinion.

 

If you and the PM have done everything possible to get it rented (online, open houses, professional photos etc) the only thing left if price.

Drop the price and secure a tenant, you want to look like the best value house especially when you are competing against 100+ other properties.

 

Advertise 2 weeks rent free (overcomes the objection about having to give 2 weeks notice at current rental) and maybe throw in a paytv subscription. Think of things like this that cost you almost nothing after tax and can appeal to a prospective tenant.

 

Perhaps look at strategies such as advertise it at a lower rent (so that for people who sort results by orice or filter on price will see your bargain) and in the text of the ad note that after 4 weeks the rent rises to however much you decide.. and be sure the PM notes the rent rise on the lease.

 

Your PM should be monitoring enquiry as well as attendance. If you have zero enquiry (assuming a good advertising campaign) then it's a price problem. If you have enquiry and people are showing up to view the property but not applying, it's a property problem. The feedback should be sought by your PM and adjustment planned to the property accordingly.

If enquiry is zero, drop the rent by $5 every 3 days until you hit an acceptable enquiry level. Then stop and open/show the property. Then follow above if no one applies or repeat the rent drop. Someone will rent it at a price that is market for that property at that time - your PM's job is to find that sweet spot and sometimes you have to manage the managers to do so

 

There are many variables involved in listing a property for rent and finding a new tenant. These include the potential tenants, the rental property itself, You, your Property Manager, the rent rate, the marketing method and the rental market at the time.

Presentation, Photography and advertising campaign should be looked at first if still no interest or movement the asking price may be too high or your property manager may not be enthusiastic or working in your best interests.

 

I hope you're not still without Tenants!

In any case, what you're essentially trying to do is to sell your property in a flooded market. Simple economics (Supply + demand) would indicate that if there are more properties, you should drop your price. I think this should be your absolute last resort!!!

The only thing you achieve by dropping your rent (Assuming you're asking fair market rent) is losing money and dropping the value of the property in your customers (tenants) eyes.

Alternatively, you should sweeten the deal for the tenant. Put yourself in their shoes, what is it that they want most. Is it a shorter lease term. Is it a longer lease term. Is it flexible payment options, a lower bond or some other differentiating factor that really sets your property apart from the crowd. Be creative here, free rent isn't the only option. Maybe offer free removalist or something to take the stress of moving house off the tenants hands.

A few people have already had some great suggestions like professional photography, allowing pets and professionally staging your property for inspections.

Alternatively/additionally, you could try to sell the area and all of it's attributes that could be appealing to potential tenants. If it is a 1 bedroom apartment, consider what kind of person would be living there and what would appeal to them. Likewise, if it is a 4 bedroom family home, consider what is important to families in your area.

At the end of the day, you're selling your property just as much as if it was for sale so consider what makes your property special and really leverage it.

 

Bond amount is negotiable over there?

 

Not specifically, my mistake. But you can get creative by allowing tenants to use bond loan etc which takes the upfront pain of the rental bond out of the picture.

 

Even if it was, is it a good idea to collect and lodge a lower bond?

Surely a week or 2 free rent would be more sensible.

 

Can do that in any market though, so doesnt really pertain to the situation the thread writer (in Perth) is in.

Of course not!
Week rent recently got some enquiries going on my Perth property, but then wasnt actually taken up (since he couldnt commence for over a week anyway).

 

Just check that this is legal in your state.
Some have minimum time frames for rental increases.
Marg

 

Clarkson?

It's very price sensitive. My last project was rented within 3 weeks which was good and someone actually offered more than asking price for one half of it which was gobsmacking.

What price are you at and how does that compare to the other 105 listings?

I use and out of area PM and it's working fine.

 

Very relevant point @Marg4000

 

Thanks all, some good points above

 

I have a property in Perth that has been on the market for rent for 5 weeks. We have not been getting good quality applications. I talked to the agent about the price and he advised that price is not the issue (based on prospective tenant feedback). We ended up dropping the price by $20 per week and got a quality application 3 days later. It could be a coincidence but with a lot of stock on the market I believe price makes a difference.