Unable to rent out my unit in South Perth

Hi everyone

I'm at a loss as to what to do to try and find a tenant for my investment property. It's a 2x1 in South Perth, which has been rented out continuously (by different tenants) for the last 5 years at around $400 per week, but it has now been vacant for 2 months despite me dropping the rent to $330 per week. The walls were looking a bit shabby so I've had them freshly painted.

** Link removed at OP request **

If I search for 2-bed properties on realestate.com.au for under $350, there are currently 41 results and mine appears somewhere on the second page.

I'm not sure what to do? My agent has not offered any suggestions, and I had to come up with the wording of my ad myself and I drive all decisions on pricing etc. I'm wondering if another agent would be successful in renting it out? Can I have 2 different agents trying to rent it out at the same time, or would I have to first terminate the agreement with my existing agent?

I don't have a "for lease" sign up, just advertising online. Apparently there are 2 other properties available for rent in the same complex (out of 12 units) which doesn't help.

There has been a home open every week, where between 0 and 2 people turn up. Some people have given positive feedback and said that they'll apply, but then we don't hear from them. Other people have said they need a place with an outdoor area (but nothing I can do about that!)

Any other suggestions? Feel free to be brutal!!

Thanks
K

 

What is the feedback from PM??

 

The only feedback from PM is that the rental market in Perth is the worst it's been in years, and some people have said it is too small or that they want a backyard.

 

Both of these are true - how much are similar units in the area fetching?

 

I would say they are fetching a similar amount. Maybe for the same price you could get something sliiiightly larger or with a balcony/outdoor area. But my agent advised that I don't need to drop the rent, as if somebody is interested they will make an offer. Would dropping the price $5 to $10 make much of a difference?

 

Nothing obviously amiss with the ad.

Couldn't find ads for the other units on re.com.au. Do you know what their asking rent is? Is your agent managing them too? If there are three units for rent in the same block, you'd probably be better off being competitive on the rent if they're all alike.

I'm not fond of empty properties and would rather drop the rent regularly til I get someone in then hold out at a fixed price. But your agent doesn't sound fantastic either, so I would be wondering how much the lack of activity is due to their performance rather than the market.

Not sure if you can have two agents managing or just drop this one, worth looking into if you're not happy.

 

Both of the other units are being managed privately I believe. One of them is listed on re.com.au for $430 a week (property ID 416821169), the other I'm not sure... there's just an A4 piece of paper stuck on the door with the owner's mobile number!

Re: the agent. The good thing is that she offers a reasonable all-inclusive price, so I don't need to pay extra to advertise or a leasing fee when finding new tenants. But I think it may be a false economy!!! I do like her as a person and don't want to finish on bad terms!! Maybe I will make some enquiries.

 

Yeah, may be a false economy. Looks like a two person agency that does sales and rentals? Probably wouldn't put them in a position to respond quickly to enquiries, especially if they're trying to cover all Perth.

Or that's an experience we had once when we signed with a competitive small all-city start up. Had personal attention from the principal, he was on the ball with everything, then unfortunately(?) he expanded and got more staff and their performance was pretty dismal so we moved on.

Good luck, hope you get it rented soon! Looks like a nice place. Prefer yours to your neighbors!

 

You could consider making it an air bnb property

 

In a market that is over supplied every $10 makes a difference. You may not make the short list for a prospective tenant to look at if there is something better available for same rent.

The key things you can do:

- make sure photos and advert are best possible (use professional photos)
- make sure rent is competitive and property well presented
- make sure you have a good PM

 

The

Thanks. When I'm in Perth this week I'll see about taking better photos and if there is anything else I can do to make the property present better without spending too much money.

I've shown a couple of pics of the living area with and without furniture (the one without furniture is before I painted). Do you guys think I should paint the little wooden bar/counter that separates the kitchen from the living area the same colour as the walls? I wonder if it makes the property look a bit dated?

 

Drop your pants. Suffer a short term loss at $300/wk and get it rented for 6 months. It's better to be getting 26 x $300 = $7800 vs $0

 

That's a long time to be vacant,and a very high cost to you and your bank account,maybe the only way is give the new tenant one weeks free rent and drop the rental to 300per-week and the listing goes on page one..

 

Also check your landlord insurance. Some insurance does not provide coverage if it is vacant for over 2 months.

 

Prime example of why the "cheaper" agent usually ends up being more expensive in the long run.

Try a new agent with a fresh approach, go to market at a lower price rather than waiting.

 

I don't think the counter makes any difference.
It is generally purely price - though often the photos that PMs take aren't very good.
A photo shoot with a professional photographer will cost around $150 and make it look much better.
If similar priced places are larger or have outdoor areas then they are worth more and you should be less than they are.
I would drop the rent further - and/or think about offering 1-2 weeks free rent as a sweetener

 

Agree. If you live not too far away, consider airbnbing it. Even do that short term, get you through to January.

Also... It looks like a tiny kitchen. And I would be tempted to paint that brown kitchen wall white. If two other properties are on the market in your complex it gives future tenants too many options... You have to then just be the cheapest to secure a tenant. And it simply sounds like way too many vacancies in the area, so I'm not surprised you are getting 0-1 person viewing in each open.

 

I agree it's a long time to be vacant and I'm more than happy to drop the rent... the agent just advised against it. So frustrating!! I'll push. But how will the listing go on page one? Wouldn't I have to pay a new lot of fees with RE.com.au to "refresh" the ad?

I live interstate at the moment so AirBNB isn't really an option unfortunately. One person looked through today who said they may apply. I wonder if it's worth contacting them to offer a free week's rent.

 

How did you go, K? Did the person apply? Were they attracted by the offer of one week free rent? Re dropping the rent and the agent advising against it - sounds like you are trying to be nice with the agent, but at the end of the day she needs to take your instructions, its your $ and your investment.

 

Just posted this in a similar thread but thought it might also be of interest here. An extract from our newsletter released today. I also wrote an article entitled "Reducing the rent if necessary" - unfortunately site rules prevent me from linking directly but it's under the 'For Investors' > Investor Articles tab on our website.

Active Leasing

Certain types of property and geographical areas in Brisbane are presenting a challenging leasing environment. A recent experience highlights the important roles both agents and landlords play in the success of the leasing process. We recently secured the business of a client whose property had been vacant for five weeks with another agent. MyPropertyPro secured a tenancy within 72 hours of client transfer. There were a range of items that contributed to this “success story” influenced by both the landlord and the agent that always form a part of our strategy.

What we do as agents:

• Provide a realistic price indication based on market conditions
• Maximise exposure by suggesting a Highlight Listing Package (depending on location the cost of this is recovered by reducing vacancy by three days)
• Provide private and open inspections at times that suit the potential tenant
• Listen carefully to and act upon market feedback
• Promptly process applications from potential tenants and keep them informed through the process
• Provide approved tenants the required documentation promptly

What landlords can do

• Approve the Highlight Listing Package
• Approve professional photography
• Respond to market feedback
• Be conscious during the leasing process of monitoring communication methods and responding as soon as practical to agent requests for information and/or approvals