How To Know If a Property Will Be Easily Rented
One of the biggest fears people have when investing in property is whether or not their property will be rented or lie vacant. How do you make sure your property gets rented.
0:00 – Introduction
1:26 – How to make sure a property is able to be rented before you buy it
3:57 – Understanding the type of tenant
6:09 – Marketing your property properly
7:25 – Have you ever had an unrentable property?
9:08 – How to rent your property faster
10:53 – How long does it take to re-rent a property
13:00 – Should you get a rental appraisal before renting a property?
One of the biggest fears people have when looking at investing in property is how do I know if my property is going to get rented? Or if you already own a property? How do I make sure that the property doesn’t stay vacant? So today, I have with me, Lauren Robertson, who is a rental manager from rental results. And we’re going to talk through this and she’s going to give us some insight. So you can work out whether a property is likely to be rented or if you got a property, how to get it rented. So hey, Lauren, thanks for coming on today. Yeah, thanks,
Ryan. Thanks for having me.
No way. So do you want to just give us a quick rundown of I guess, who you are and what you guys do? And then we’ll jump into you know, how we can assess this?
Yeah. Great. So yeah, I own rental results. So we’re a property management specialist company. We’ve been around now for over seven years, and we manage over 600 properties within the inner city suburb of Brisbane. So 15, Kay’s from the CBD, also been doing property management for 18 years now. And we’ve won quite a few national awards. So yeah, it’s a long time to be in property management. But love it still love the the industry.
Yeah, so let’s just say you’ve rented a lot of properties, you’ve seen a lot of properties in your time, you know a lot about this space, and what makes a property likely to get rented or what makes the property more likely to stay vacant? So let’s start with the investors looking to purchase a property and then we’ll go on to people who already own it. But let’s say people are looking at a property. They’re like, okay, I might want to invest in this property, but they hadn’t they don’t know about the market or the area, how do they know that property is likely to be able to be rented or not?
Yes, I have also written a book on this, which is rented. And it’s got a website rented.com. Today, you but basically, it comes back to understanding the market. So knowing what the vacancy rates in that particular area are understanding your property. So knowing the type of tenant that that property is likely to attract and whether there’s a market for that. And then also making sure the property is priced right and presenting well. So there’s a number of different factors.
Yeah, so vacancy rates, that’s quite easy to find sq m, have a tool that outline vacancy rates, and people go to onproperty. com. au forward slash vacancy, it’ll redirect there, you can put in your suburb or postcode. It’ll tell you what the vacancy rates are, what sort of vacancy rates? Will you assume a good versus bad? What should be avoided?
Yes, I think something to bear in mind is vacancy rates, anything typically under 3% is good. So over 3% is deemed an oversupply in that market. Other things to consider is whether you’re going to furnish the property or unfurnished so when you’re furnishing it’s, it’s there’s benefits, because obviously depreciation and there is definitely benefits around furnishing a property. But you do need to consider that only a smaller percentage of the market is looking for furnished as opposed to unfurnished. And also, it’s it typically is only works in certain areas that you’re going to have a high demand for furnished property. Those tenants tend to stay shorter term. So they tend to be a bit more transient than a tenant who’s looking for a longer term, unfurnished property.
So there’s specific suburbs that furnish work and suburbs that don’t like is it in a city that furnish works, because you’ve got, you know, people traveling for work and things like that? Whereas, you know, out of suburbs, not many people will want furnished? Is that exactly
right. And also the current market with everything that’s happened with COVID. So we don’t have as many people coming to the city at the moment, we’ve also got less International, obviously, international troubles not happening. Yeah, so there are things to consider when you’re furnishing and finishing, we’ve seen a lot of furnished properties lately come off the market, and they aren’t finishing them. So there’s a number of factors. Okay,
so people are kind of moving towards that. So you mentioned the type of tenant in an area and understanding the type of tenant can we expand upon that? And what you mean by that? And how to find out that sort of information?
Yeah, honestly, I think the best advice would be to speak to your local property manager, they’re going to be able to give you advice on the type of tenant that property is going to attract, who’s been looking for those properties, those features that that property, those tenants are looking for in a property. So for example, if you’ve got a house, typically that will appeal to a family with children or pets, and those people tend to want things like fence yard so that the pets or the children is safe. You know, they tend to want things like dishwashers, air conditioning for comfort, and they tend to be prepared to pay more for those types of things. So that’s just a general idea.
Do you have any examples of a property that maybe wasn’t suited to the market and was difficult to rent as a result? Just So we can get an idea.
Yeah. So I mean, obviously we’ve got, like we’ve we’ve like, yeah, I can think of one at the moment. So it was in a suburb near the university. And the owners in particular, were wanting a family. So as their ideal tenant, but that property had one bathroom, four bedrooms, the layout of the property was that the master was on one level. So downstairs and the remaining bedrooms are upstairs. So that which is someone with young kids, I know, when they were really little, especially It was like, Okay, I want to be on the same level
as them because I don’t want to be going up and down during the night. Yeah, for sure.
And I think that’s the sort of thing like, especially with one bathroom, too. So, you know, a family that, you know, they may want two bathrooms, or they would want all the bedrooms on one level, unless the children are older, then that may suit so I think it also comes back to how the property presents. So typically, external, like that is a big part of it as well. So tenants, you know, when you you turn up to a property, if it’s well cared for well maintained, it’s appealing to walk through, then that’s likely to attract more tenants. It also needs to be marketed properly online. So I always recommend professional photography, 2d 3d floor plans, we do a virtual 360 degree walkthrough to is also advertising it on like the top real estate search websites. And also at the top of those searches, not just a standard listing, having an online booking system, so tenants can book times that suit them being able to show it at times that are actually suitable to your prospective tenants, as opposed to just you know, two o’clock on a Tuesday.
So how do you how you market the property plays a large role in how likely that property is to be rented? How quickly for how much money etc?
Yeah, so yeah, typically price presentation and promotions and knowing where the property sits in the market and making sure it’s at fair market rent. Also knowing the tenant that you’re likely to attract because of the property that you’ve got. And then marketing gearing that advertising towards that type of market. And then also making sure it presents really well online. Because I think sometimes properties are really there’s they don’t do it justice, because the photos that just
tell them don’t even have photos. It’s like one photo the outside of the building. And that’s it. And you’re like, Yeah, I got no idea what this is like, yeah, have you ever because I know a lot of people investing the first time they’re getting in, they’re like, Oh, my God, like, what if my property is never rented and remains empty, I won’t be able to afford this mortgage, have you ever had a property that was just impossible to rent,
their properties will always rent. So it really does come down to your price presentation and promotion. So if it was $10 a week, you’d have a lot of people $100, you know what I mean? So at some point, there’s going to be a price point where there’s going to be interest, we find it really interest in some markets, we’ve got we’ve had our $10 reduction, all of a sudden, we’ve got three or four applications. So it’s just can be set super price sensitive. And other times, you know, we’ve got people, you know, 15 groups handing up an inspection offering, you know, 50 $60 more awake because they want the property. So, yeah,
yeah. So I think the big thing for people who are looking at getting into the market who are worried about this is a look at those vacancy rates, and see what they are in an area. Because if you are looking, you know, outside of metropolitan areas, potentially, you could have large swings in vacancy rates. And if you’re in an area that’s got, you know, a huge vacancy rate, then maybe you can’t rent your property, or you’re not willing to drop the price enough, because of the damage and things like that, that comes with having tenants and the wear and tear. But I think like in Metro markets, if you’re looking at vacancy rates, and you’re getting under that 3%, or even under 2%, as long as you’ve got a property that matches what people in the area want, and you can talk to a rental manager, you will be fine. In terms of renting, that it’ll just, I guess depend on price, how well the property presents, and how will you market it? And what about so if people own properties, rental properties, either they’re having trouble renting it out as quickly as they’d like, or for the price that they’d like? Or how do you just rent out a property a bit faster?
Yes, definitely, I’d get if your property is sitting on the market for rent, I probably get a second opinion from another agent in the area and just ask them what they’re seeing happen. So or even speak to your current agent to see you know, other things that you could be doing. Hopefully, they’re coming to you with that advice, but you maybe want to ask them other things that you could be doing in order to attract more interest. Sometimes it can be you know, reducing the price, it can be increasingly advertising or having a look at how it’s sitting online and where it’s, you know, there’s 120 properties that are comparable to yours available at the same time, then that’s an oversupply in the market. So how are you going to get your property to stand out so it might be adding incentives like one or two For a rental, there’s a few little things you can do to try and make your property stand out. But yeah, I think it really does come back to you know, making sure how it’s looking online. So professional photography, having all your floor plans available. So people, you’re getting qualified leads or qualified tenants showing up at their property. So they already have a really good idea of what the property looks like the layout, and they’re almost, you know, ready to apply, because they’ve seen all of that online.
Yeah, well, that’s the thing with online these days. Now, you can look through it and you can really get a feel for whether or not it suits your needs, especially when there’s a floor plan available. And you can see orientation of the property as as well as how big the rooms are and stuff. If you’re getting people through who actually know, yeah, this likely suits me, I’ve just got to double check it to make sure it’s good, then they’re more likely to rent it. What sort of, let’s say people have a person in there that person leaves, does it generally take an extremely long period of time to rent out the property? How long a vacancy is normal? Yeah. So
again, that question probably really depends on the market in across Australia, and also vacancy rates in that particular area. I mean, in Brisbane, we’re always advertising six weeks in advance. And the reason being is because we want to ensure that there is zero vacancy. So that’s our aim. So this is you’ll get notice from the existing tenants that they’re going to be leaving, you’ll then market it before that they’ve exited the property. And then, you know, hopefully have someone apply and be ready to have other people move out, there might be a couple of days delay with the changeover and checking it, and then new people moving in. That’s right. And really 95% of the time, that’s the case. So if you’re getting to about two to three weeks prior, and there’s no interest or no applications, it’s time to adjust that marketing strategy in order to attract more interest and make sure that there’s no vacancy.
Yeah, and what about if someone’s just purchased the property? So the date just taken vacant? possession? Obviously, depends on vacancy rates depends on the property. Yeah, and everything like that. It can vary. But is there a huge swing from you know, sometimes it ran straight away, sometimes it takes two months? Or is it more like
there can be and again, I think it’s making sure that the whichever property manager you choose to work with, you’re getting really good communication. So really, you want to be getting an update after every inspection at least once a week as to what you need to do in terms of encouraging more interest. So if you’ve got a vacant property that’s costing you money, so you want a tenant in it ASAP. So really, if it means reducing the rent by $10 a week to attract someone quicker, you’re much better off because you consider the annual return versus holding in there for that, you know, say you want for 20 a week, if you get for 10. And it rents today versus three weeks time, you’re much better off so.
And should people look at getting a rental appraisal from someone like yourself, let’s say they’re looking at purchasing an investment property, is it worth calling someone like yourself and saying, What will this rent for? Or is that like annoying for you is that have actually settled on the property and got a contract yet? Obviously, we don’t want to be wasting your time. No, definitely,
I definitely would suggest that. So I think really, when you’re starting to look for properties, I’d suggest connecting with a local agent. Obviously, we’re more than happy to help anyone in Brisbane. And yeah, making sure that you understand, okay, what’s the vacancy rate, like in that area? what’s the what’s the statistics of the demographics? Who are likely to rent that property? What who’s going to who’s probably going to appeal to and what do they want to see in a rental property? Are there things you can do to add to that property to make the rent higher?
Yeah. So and that’s okay. Right. So someone’s interested in investing, they can call either yourself or another rental manager, depending on what area they’re in. And you guys are happy to at least talk them through that, which could make the decision easier as to Okay, what exactly should I look for? Because let’s say you’re looking at a particular suburb, you might say, okay, a lot of people in this suburb like this particular type of house or this type of unit, and this is what’s important to people. And so then as an investor, when you’re out looking, you can be like, Okay, my branch manager told me that, you know, this is important having an internal laundry in a unit, for example, or having, you know, fences or air conditioning in Brisbane, those sorts of things, you can start to look at those and your rental manager can become an asset to you in helping you make a good decision.
Definitely like we we do this every day of the week, and most of us, like our officer property investors ourselves. So I think you know, the more information and advice you can get in that early stage when you’re buying is really important, at least and you’d get a range as to where it sits in the market to that particular property might be looking at so you can do your figures and work out Okay, my home loans this this summer. I’m going to achieve, you know, factor in your right to body corporate, all those sorts of things, and then you can work out. Okay, this is how much I’ll have at the end.
Yeah. So hopefully, hopefully this has really helped people out there just kind of get rid of that fear of oh my gosh, my property is gonna stay vacant. If you do a bit of due diligence beforehand, as we talked about, no need to do a lot, check the vacancy rates area, check what type of properties rent well in that area, talk to a rental manager and get their input. And they can obviously give you a better idea of Okay, how hard properties to rent in this area as well. But you know, if you do that, before you purchase a property, you should be fine. And if you already own a property, there’s a lot of different things you can do to get that property rented or increase the price of that property, which we’ll talk about in a future video as well. So hopefully, this encourages people. You know, I hate to see people go for guaranteed rental returns because they’re too scared of not being able to rent a property. So this is really helpful. Thanks so much, Lauren. Where can people where can people find out more about you? Or if they’re interested in working with you and your team if they got properties in Brisbane?
Yeah, they’re welcome to go to our website. So rental results.com. Today, you can download free checklist, things like that. Also, always feel free to call or email me so all of my details are on the website. But by emails, Lauren at rental results calm today, you are more than happy to help and provide any advice.
Yeah. Awesome. Thank you so much. So go ahead, check out rental results.com.au for those free checklists. And as well if you want to get in contact with Lauren, she’s left her email address there. So thanks so much for coming on today, Lauren, best of luck. Best of luck to everyone out there and until next time, stay positive