If you are purchasing an investment property, then it’s important that you do your thorough research first to ensure that you don’t suffer from long-term vacant properties. There’s nothing worse than having a property that is lying vacant and you have to pay extra rent whilst you try to attract new tenants. Ultimately, the longer your property remains vacant, the more money it will cost you and hurt your cash flow.
Fortunately, there’s a number of things you can do before and after you purchase your investment property to ensure that your vacancy rates remain low. These include the following 10 ways:
10 Ways to avoid vacancy on your investment property
1. Buy in a great location
Firstly, you should be purchasing your investment property in a great location. This means that your property should be close to core amenities such as public transport, shopping centres, schools and restaurants. By having all of these everyday amenities close by and ideally within easy walking distance, this will make your investment property far more appealing to rental tenants, making it a far more desirable property to rent.
2. Use a reputable Property Manager
If you don’t want to manage your investment property yourself, a Property Manager will be able to assist you. They can help you with advertising your property for rent, finding and screening tenants as well as conducting property inspections, collecting rent and much more. It’s best to shop around and employ a Property Manager who is reputable and organised, who will also come back to you quickly.
3. Buy in a suburb that has a high rental demand
By purchasing an investment property in a high rental demand suburb, this will mean you will have more demand than supply, making it easier to attract rental tenants to your property who have limited options to choose from.
4. Buy a property that suits the demographics
When buying a property, you should also think about the local demographics and ensure your property type matches. For example, if your suburb is home to mainly singles and couples, then it’s best to purchase a one or two-bedroom property, whilst a suburb home to mainly families with children will typically prefer a larger 3-bedroom property.
5. Set reasonable rents
When setting rents, it’s important to be reasonable and not charge over the top as this again will put tenants off if they can find a similar property for less down the road. To ensure you are setting a reasonable rent, look at comparable prices for similar properties in the same suburb to get an understanding of what the going rate is. If your property is brand new, or has water views, then you can charge a premium price as people generally are happy to pay more for something new or with a view.
6. Be proactive
If you decide to manage your investment property yourself, then it’s important that you are proactive and go looking for clients, rather than wait for them to come to you. Speak to friends, family and colleagues to see if they know anyone looking to rent as well as put ads up and even advertise in your local gym or café.
7. Reduce the rents if face lots of competition
If you are still struggling to find rental tenants for your investment property, then you might wish to offer an incentive such as a rent reduction or the first week rent free to entice tenants to sign up a lease. This might occur if you face lots of competition, and it’s better to reduce the rent slightly and attract someone in, rather than face a few weeks of vacancy. However, a reduction should be for the short term only, so it doesn’t hurt your cash flow.
8. Buy within an apartment development with facilities
Purchasing an apartment within a development that has resident-only facilities will make your apartment far more favourable for tenants. Today, tenants prefer a convenient lifestyle, so having facilities such as rooftop BBQ, swimming pool, outdoor cinema, sauna or bar and terrace will help to rent your property out.
9. Make your home liveable
You can also make sure your investment property is up to scratch and a liveable place where tenants will want to stay. If your property is older and suffers from damp or mould problems and you don’t do anything to fix this issue, it is more likely to drive your current tenants away once their lease expires and also put others off from signing up.
10. Rental guarantee
If you buy off the plan, then as part of the package, your Property Consultant and Developer might offer you a rental guarantee. This means that even if your property lies vacant, you will still receive a set rental for a certain time period. This is generally for the first six months, but will be stated in your signed contract.
You should also consider who your tenants are. You want to be attracting high quality tenants in good, secure jobs who will be able to pay the rent in a timely fashion and not have to vacate the property or cut the lease short. A Property Manager can assist with this by running background checks for you.
Get in Touch
To find out more about avoiding long-term vacancy on your investment property and what steps you can take to avoid this, contact the iBuyNew team today. Give us a call on 1300 123 463
and speak to one of our friendly Property Consultants to learn more.