The decline in local rents and a simple strategy to keep your investment property earning. 

Rents are on the decline for the first time in many years. As is with most things supply drives demand. Compared to 3 years ago there are simply more rentals available than tenants to fill them and this is having downward pressure on rents.
In South Australia the current days on market for rental properties is 33.1 – at almost a full month this can mean significant vacancy periods, especially if tenants are changing every lease period.

*Image and data courtesy of RP data. 

Wether landlords have single or multiple rental properties they key focus in times such as this is to keep generating cash flow. Pure and simple.

The easiest way to ensure this is the most obvious. Tenant retention. Keeping the current tenant (provided they are good) is the easiest way to ensure landlords don’t experience those long vacancy periods.

The harsh reality is that average rents aren’t what they used to be and although it may not be ideal, sometimes trimming a bit of the rental dollars can actually save an owner money if it gets them a tenant quicker or keeps someone in the property.

When speaking to tenants one of key considerations they have when deciding whether to renew a lease is the upkeep or maintenance of the property. Keeping the property in tip top condition not only increases the likelihood that a tenant will stay on for another lease, it protects the value in the property.

I’m not suggesting that we all start dropping rents and spending thousands on renovations to ensure survival but it is important to be mindful that some cases may require alternate solutions, further increment or concessions.

The reality is that like a business, investment properties can make less money in harder economic times. They key is to ensure that owners don’t get romantic about the way they make their money and again like a business, ensure any property investment portfolio is prepared, in good condition to come out on top.


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