Struggling to find tenants

If it is a slow market it is better to Drop the price by $10 - $20 per week then have it sit for a long period and then it becomes a dead listing on the internet. That extra $10 - $20 per week could end up costing you $1000s if you sit and wait. The market value could be correct at the higher rent but as @Perthguy has said due to amount of stock available tenants become more picky about value for their money as they know there is a lot to choose from.

 

then how is that market value?

 

Didn't like it because you dropped $20 a week but wise words.

When we purchased in Brisbane earlier this year the PM from the sales agent thought we would get 480-500 pw (very optimistic) I worked off 430-450 but did review as low as 400.

After settlement we dropped the PM (very poor service) and went with the family PM who also thought 430 would be the price but after 10 days we dropped the price to 400 pw as there was no demand.

We could of likely dropped it less but went to 400 from a mind set issue as 410 or 405 will be 1 silly but also when people search rental up to 400 pw if we were at 410 we wouldn't be included. We had a tenant locked in a couple of days later so you will never know but we did have it on the market for a month (450 price though) and we decided to stop working with the old PM because of how useless they were - I always had to follow up them on everything (I really mean everything, including putting it online multiple times).

The sad part is that if they did a good job with this new property the old PM would pretty much had another 2 rentals on their books as their fees were 1-1.5% cheaper (sorry cant remember) but it came down to their value wasn't there.

 

@hash_investor in a normal market I am meaning when it is not quiet or there is a over supply. Obviously factors will always change this. Ourselves as the PM and the owner know that the property is worth that $10 - $20 extra but due to the current conditions it is smarter to reduce the rent and have cashflow on the property. The property would be rent at the extra $10 - $20 per week but depends on how long the owner can/could afford for the property to sit vacant. As the saying goes for sales - Their is a buyer for every house it is the same for a rental - there is a tenant for every investment property but just depends on how long you want to sit and wait for that higher amount

 

Market value... if we wait long enough we can find a tenant at the price. It is the going rate for that type of property in the area. With rentals though, it is a numbers game. List a place at $450 pw and it's vacant for 2 weeks vs listing for $440 pw and it's vacant for a week. A week is worth $440, so if the $450 listing pushes out to 3 weeks vacant then you are behind, even if you finally find a tenant at $450.

 

Hey @Tink how are you? I hope you have found tenants already, but in case you haven't. Primarily, I am not an expert on either quiet market or oversupply one because I am in Melbourne inner suburbs. My advice, my friend, is that you should try to make your property more attractive to potential tenants so I would not recommend you decreasing the price too much because at the end of the day, you will end up losing money or destroying your budget and I think the situation in Perth is pretty volatile in all industries. It may sound silly but what if you apply some marketing strategies such as Using 9 or 7 at the end of your price. For instance, $399 instead of $400, describe the benefit of the area for your target, take professional pictures, not a fake one. I would suggest reading few books of marketing such as The irresistible offer and Mindcontrolmarketing.com