We often hear lots of talk around the housing marketing relating to sales, clearance rates and sold prices but very rarely do they talk about the rental market. It’s interesting because the two are related and when we see a slower sales market we often see the roll-on affect in the rental market.
The start of 2018 went off with a bang and properties were being snapped up for lease in record time, with properties not lasting more than 7 days and generally being leased after one inspection. In many cases tenants were offering higher than asking rentals and longer lease terms so that could secure their dream home. Typically at this time of year however, things start to slow down, less people at open for inspections and properties taking slightly longer to lease.
So just how do Landlords prepare for a shift in the demand? As with all things preparing for the worst and having financial savings to assist if a property becomes vacant is one way to do it, however we want to look at a more proactive approach and one that keeps those funds in your pocket.
Let’s go back to the start, when we secure a lease we always try and time the lease end date for ‘peak season’ that is typically from October – March. If a tenant is offering a six-month lease in June, then this might be a time that we would consider a shorter lease so that if it does become vacant it does so at a good time of year.
Consider securing a longer lease if possible, so similarly to the above example if a tenant is after a 12 month lease we can try and negotiate an 18 month lease which will bring the end date closer to the ‘peak’ leasing season. This also reduces the risk of the property becoming vacant sooner if you only secured a 12 month lease which would incur you more costs.
Owners should also promote the property to those in the building and close by via a brochure, the reason this is an effective strategy is that often we see current occupants in the building having a friend or family member that would like to lease in the building, but they may not necessarily be looking online all the time.
We also recommend Landlord’s use the quieter time in the market to do renovations or repairs to their property in preparation for securing a higher rental in the warmer months.
It is not just about ‘reducing the rent’ which some agents use as the only tactic to lease a property in a cooler market, it’s about planning ahead and looking at all options, not just the easy ones.
If you would like to speak to us about our proactive approach and how we focus on minimising vacancy, then feel free to contact us.