This is one of the most common questions asked of property managers. It is important to remember that as your property manager, we are unfortunately not the gatekeeper of rental values. Rental levels, like sales values, are determined by the market – what a tenant is prepared to pay for a given property in a given moment in time.
To determine the rental value of your property at the start of each tenancy and during tenancy, we compare your property to similar properties on the market and consider the current demand for rental accommodation and the likely vacancy period.
During a tenancy, we consider the above and the nature in which the tenancy is being conducted. For example, the market rent may be $5 more per week than the current rent on your property, but you have a tenant that is paying the rent on time and taking care of the property. With a situation like this, we will discuss with you the benefit of increasing the rent versus the cost in lost rental through vacancy if the tenant elects to vacate.
We review your rental regularly throughout the year and when doing so we undertake the review with the above in mind. Naturally, we will discuss market conditions, the status of the tenancy and the scope for both current and future rent reviews.
As tenants have so much ready available information at their fingertips, an automatic price increase at the anniversary of the lease is no longer the norm.
There are another 5 variables that will ultimately determine the rental amount for your property:
- The time of the year the property is available. Research has shown that there are different times of the year that have more movement of tenants than other times of the year. What is the supply and demand of comparable properties when your property is being advertised?
- The property itself. Through technology, tenants have the ability to quickly and easily compare your property with all of the other properties on the market. How does yours compare?
- The marketing of the property. This plays a huge difference to the outcome as the amount of time that tenants search for properties is getting less and less. Therefore, is your marketing fresh and on Page 1 of the search portals?
- The service provided by the property manager also plays a huge role in increasing your yield and decreasing your vacancy.
a. Is your property Manager:
i. making it easy for prospective tenants view the property?
ii. having multiple and flexible viewing times?
iii. showing up to inspections on time?
iv. fully aware of all the features of your property?
v. making the tenant application process easy to navigate?
vi. communicating the status of the tenant’s application timely? This is so important as tenants normally apply for more than one property at a time.
5. The price being asked is a large determining factor in the tenants decision process. Is your asking price reflective of the current market?
Above all else, is your property manager communicating all of the above information to you in a timely manner so an informed decision can be reached?
George would like to offer Chan & Naylor clients an exclusive and limited offer whereby George will personally review the Landlord’s Investment Portfolio to determine whether he can improve their rental yield and he’s also offering 6 month’s Free Management Fees so clients can put Mosaic Property Management’s services to the test.
To take advantage of this offer, please visit click here.