Are you the owner of a vacant property? Have you been trying to rent your place, but are struggling to find a tenant? Are you concerned that the longer your property is vacant, the harder it will be to lease it?
Over the last couple of months, much has been made of how the coronavirus crisis is affecting the residential rental market. In addition to the obvious changes – like the need to reduce costs, for more space, private inspections and rent relief – we’ve also seen more subtle impacts, like the shift from short stays to longer leases. All of this has led to a steady increase in the volume of rental property that’s vacant and, by extension, the number of landlords asking, “Why can’t I rent my property?”.
While finding a tenant may be more difficult at the moment, there’s still plenty of potential applicants in the market, so it’s definitely not impossible. However, different times require different approaches and you may need to try something new to secure someone for your empty rental property. In planning this, you should consider what your target tenant is looking for and adjust the presentation of your property and the proposed lease arrangement accordingly.
With all of this in mind, if you’re having trouble finding a tenant for your vacant property, we recommend you consider the following three options.
Option #1: Reduce the rent
Lowering the price may be ‘how to rent my property 101’, but it usually works. And, given the number of renters who are currently earning a fraction of their former income, offering a discount could be especially effective – particularly if your main goal is just to get someone into the property and some income coming in again. After all, a property rented at a lower rate will almost always be more profitable than vacant property.
If you’re not keen on the idea of locking in a lower rate for the full lease term, you may wish to consider a temporary rent reduction. This could take the form of a rent-free period or reduced rent for a set period (e.g. the tenant pays 75% of the full amount for the first 1-2 months). Both of these arrangements allow you to increase the appeal of your property in the short term while providing the comfort of a higher rent rate in the longer term.
Option #2: Change the lease term
As alluded to above, with travel restrictions all but stopping the short stay rental market, many owners of these properties have turned to longer term leases. In addition to improving the odds of finding a tenant, this change can also provide investors with a greater sense of stability, which is particularly valuable at such an uncertain time. However, it should be noted that, if you are making the switch, you will need to adjust your price expectations (long leases are generally at a lower daily / weekly rate than short stays) and potentially list with a traditional property management agency.
Alternatively, if you have your vacant property advertised for a long-term lease, you may want to consider allowing applications for shorter tenancies. With the current restrictions delaying many people’s plans to move interstate, or even relocate overseas, there’s been an increase in demand for 3 – 6 month leases. Clearly stating that you’re open to shorter-term arrangements in your advertising could help make your property more appealing to this market.
Option #3: Furnish the property
In addition to the increased interest in short-term leases, we’re also seeing greater demand for fully furnished properties. This is being driven by three key groups:
- Australian citizens returning from overseas,
- people who have had to delay their relocation plans, and
- people who need more space because they’re working from home.
With this in mind, furnishing your vacant property may help you to find a tenant. However, this will depend on its type and location – for example, furnished apartments near major economic centres (e.g. the CBD) are in demand, but furnished family homes in the suburbs aren’t as marketable at the moment.
If you are interested in converting your vacant rental into a furnished property, Local Agency Co. can help. We can advise if the change would be worthwhile (based on market moves and demand in your local area) and manage the furnishing and advertising process. Give us a call on 1300 358 888 to discuss this service and get a quote.
Want more information?
If you’re having trouble finding a tenant or would like some advice on what to do with your vacant property, give Local Agency Co. a call. We’re your local property management experts that help property investors SAVE MONEY + TIME & REDUCE STRESS by finding great tenants. So, if you have any questions – or just want to discuss the current state of the market – contact us on 1300 258 888 or via info@localagencyco.com.