Maintaining Your Investment

If you’ve been putting off replacing the kitchen or installing an air conditioner in an investment property, now might be the time to take stock of your competitive position. Rental prices in Melbourne and regional Victoria are stabilising, and rents could soon fall in some areas, as vacancy rates across the state continue to blow out.

The median weekly rent for a house in Melbourne increased slightly to $390 during February, while regional Victorian rents stabilised at $300, according to the Real Estate Institute of Victoria.

SQM managing director Louis Christopher says Melbourne has clear pockets of oversupply and of undersupply. ”There are markets within markets, and local conditions are set to dominate rental conditions in 2013,” he says.

KPI’s Melissa Opie says tenants have become fussier as rents have risen. She says landlords need to be ready to spend on upgrades when tenants go on holiday or vacate.

”These days air conditioning is not considered to be a luxury – it’s a necessity,” she says. ”A lot of tenants also want a dishwasher.”

Catch a tenant

If you get very few inquiries about your rental property from prospective tenants, it usually means you have set rent too high. Don’t automatically expect to receive the same rent or more for a property as tenants change, and be prepared to lower your asking price to meet changed market conditions.

Prospective tenants search in price ”blocks” – for example, $350 to $395. You will appeal to a bigger group of renters if the advertised weekly rent falls within these blocks. Tenants use price points to hunt for properties on the internet, so a $5 a week rent drop, from $400 to $395, can substantially broaden your market.

If you’ve never thought of offering a David Jones or Myer voucher to a prospective tenant as an incentive for signing a lease, think about it now. Incentives make properties stand out. Other sweeteners that work well include a free 12-month pay TV contract or free rent for the first month.

 

Article courtesy of - http://news.domain.com.au/domain/maintaining/landlords-pay-the-price-20130409-2hinn.html