Vacancy Rate

Discussion in 'Property Management' started by tomlloyd, 26th Jul, 2015.

Join Australia's most dynamic and respected property investment community
Tags:
  1. tomlloyd

    tomlloyd Member

    Joined:
    11th Jul, 2015
    Posts:
    21
    Location:
    Sydney
    Just wondering at what level people would be concerned about rental vacancy rates? I'm targeting properties in the inner ring suburbs of Brisbane, but have noticed that many of them have vacancy rates running around the 4% mark. Is that high enough to be concerned about, to the extent that it will affect my ability to find tenants?
     
    tomlloyd, 26th Jul, 2015
    #1
  2. DanW

    DanW Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    795
    Location:
    Sydney
    Yes anything above 4% is a worry.

    But remember the stats don't always match reality, also things change by settlement and you have seasonal factors.

    I had a property in Manly with 3 tenants lining up then settlement delayed by 3 months I couldn't find a tenant because it wasn't summer anymore.

    Best thing is chat with PMs in the area and ask which suburbs are in demand with which types of property, as well as checking current rental ads online see if the number available goes up or down each week
     
    DanW, 26th Jul, 2015
    #2
  3. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,605
    Location:
    Australia
    Also the advertised vacancy covers all types of property and while there might be a significant level in one type of property another type is still in demand.
     
    Chilliblue, 26th Jul, 2015
    #3
  4. proper_noobie

    proper_noobie Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    115
    Location:
    Melbourne
    How do you determine the difference? All I've ever noticed on SQMResearch is a total vacancy rate.
     
    proper_noobie, 26th Jul, 2015
    #4
  5. tomlloyd

    tomlloyd Member

    Joined:
    11th Jul, 2015
    Posts:
    21
    Location:
    Sydney
    Also realestate.com.au have a 'rental demand' score which is based upon the number of visits/property for rentals. I'm not sure how accurate or valid this is, however.
     
    tomlloyd, 26th Jul, 2015
    #5
    Toon likes this.
  6. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,091
    Location:
    Brisbane
    4% is a bit of a concern, some Brisbane rental markets have softened. There are some threads about it around here or at SS.
     
    Azazel, 27th Jul, 2015
    #6
  7. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,605
    Location:
    Australia
    You need to monitor the vacancies and monitor what leases at what price yourself. Over a few weeks you will start to develop a feel.
     
    Chilliblue, 27th Jul, 2015
    #7
  8. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,304
    Location:
    Vic
    Yes 4% is a concern but remember you are buying a property, not the market, if you understand an area know who want to rent where and why you can minimize vacancies and get above average rent.. Don't blindly buy any house with out knowing who your tenants will be and hope. You need to be very selective, and be careful what you believe from RE agents.
     
    Fargo, 27th Jul, 2015
    #8
    Gingin likes this.
  9. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,605
    Location:
    Australia
    Looking at the area with the high vacancy rate will actually assist you as you will quickly see what properties are being leased and at what price.

    Monitor that and you will know which type, style and amenities a property requires for it to be desirable even in a down turn.
     
    Chilliblue, 27th Jul, 2015
    #9
    wylie likes this.
  10. Michael_X

    Michael_X Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    333
    Location:
    Gold Coast/Sydney
    I believe 3% is considered to be a balanced rental market? So I generally look for areas below this.

    Cheers,
    Michael
     
    Michael_X, 2nd Aug, 2015
    #10
    Azazel likes this.