Tip 2
What Makes a Property Investment Profitable?
We understand that vacancy and turnover are two of the biggest expenses you have to deal with. At Total Care Property Management our aim is to minimize your vacancy rates through quick turnaround of tenants and reduce turnover by maintaining your property at the same standard as if it were our own, and therefore the tenant’s enjoyment of your property.
By keeping our eye on the rental market at all times, which you may not able to do, we can maximize the rental return your property achieves by increasing rents in a timely manner while keeping within the industry regulations and legislation.
As an investor we also understand that that your aim is to maximize the capital gain of your investment, thus keeping you well positioned in the market place should you decide to sell your investment at any time. We will assist with this by keeping you well informed of any maintenance issues, and opportunities for capital improvements wherever possible, through our routine inspections and tenant moving out inspections.
Renting your property quickly to ensure a minimal (to no) loss of rental income is extremely important. However there are some reasons why some properties remain vacant longer than others…
Rent too high – if people who are currently in the market for a new rental property deem that the rent for your property is too high compared with others that they have seen available, it will be ignored.
High supply – if there are a lot of other properties available for rent in the area, then property enquiry will be lower than during a strong demand time when supply is lower. This is common in newly built areas when numbers of new properties are available at the same time.
Poor presentation – the presentation of a property will either attract, or deter a prospective tenant. Keeping on top of repairs, maintaining the paintwork and replacing flooring when required not only attracts the right tenant, but also keeps your property asset value maximised.
Location – properties a distance away from key facilities like public transport, schools and shopping means that a tenant has to travel further to access them. This means that properties which are further away may deter good tenants. Purchasing the right property with facilities close by reduces this issue.
Vacant longer than expected – Sometimes a property is vacant for longer than expected and getting slightly less in rent is far better than getting no rent at all!
Every now and then the new tenant market goes quiet resulting in no solid tenant enquiry. After five days of being vacant, we recommend a rent change to 95% of the current market rate, just to get it rented really quickly.
To have any property sitting empty for a couple weeks (or more) is a substantial loss in income, compared with dropping it 5% below the current rental market to rent it quick. After six months it is likely that full market rent can be established again, to get the rent back on track.
