The rental market is changing...
On speaking with colleagues the rental scene seems to be changing in some areas of Sydney. As the media keeps telling us, there are many investors entering the market place which is equals an oversupply of rental property.
What does this mean to you and me as investors? Rents are not as high as they used to be. In some cases in order to get a property let, rents have to be reduced.
We manage a unit in Eastwood which has had some $12,000 spent on renovation - new capet, new paint, new range hood etc and it looked fantastic. The 2 bed-room-unit has a lock up garage, a good size laundry, and it’s in a security block, and possibly a ten minute walk to Eastwood station and shops.
Because the unit looked so good we set it with an asking rental of $450 pw. Over a period of 3 weeks there were no prospective tenants enquiring or coming to Open House inspections.
Once the rent was reduced to $415 per week it was let immediately.
We have a couple of 2 bedroom units vacant in Meadowbank and so the rent has been taken from $360 to $340 pw. Denis and I have a studio apartment in Newcastle and we have taken the rent from $210 to $190 pw in the hope of it getting it let.
As property owners we work on the theory that some money is better than no money, and at an appropriate time the rent can be increased.
So the next question is: WHAT ABOUT A RENT INCREASE?
Many of our owners have long term tenants and because of this the rent for these particular properties might be under the current market rent.
So a reasonable rent increase should present no problem at all. But what is a reasonable rent increase I hear you ask. Anywhere between $10 and $20 per week. However should your tenant want to question an increase I will always come back and discuss the issue with you.
So we will continue to do rent increases but erring on the side of caution. Feel free to email me email@example.com and we can discuss the matter.
Property inspection reports
I hope that our new design Inspection Reports are proving both interesting and helpful to you.
The purpose of these reports is tell you what immediate maintenance (if any) needs to be attended to or what in the future might need to be done at the change of tenancy.
Many of the units we manage were built in the mid 1970’s and still have original kitchens - so we are just making you aware that your kitchen might need attention.
Bathrooms are a different story. Usually a new vanity, shower screen, dual flush cistern and toilet suite are all that are needed.
However, Stephanie did some recent research and found a bathroom renovator who sprays wall tiles puts new tiles over the existing floor tiles and paints the existing bath. He did a remarkable job for an owner who was very excited with the finished product. He had changed the puce pink tiles to a glistening white. Then he tiled the floor in a soft grey. I can’t give you an estimate of cost but if you are interested to have a quote done just email Stephanie at firstname.lastname@example.org.
Changing your Managing Agent...
An owner comes to us with a problem: He is not happy with the managing agent. The property might be out of the immediate area. He asks would we manage his property in Hornsby; Paddington or some other suburb.
Of course we can manage his property. So what does he do? It is not as hard as you might think. We have been involved in two change overs in the last 3 weeks.
What happens is that first you need to check your Management Agreement with your current agent which will say now many days notice you need to give to effect the change. It’s usually 30 days notice you need to send the appropriate notification to your current agent and advise him that K G Hurst Eastwood will take over the management.
At the prescribed date collect the complete file (which includes a tenant ledger) and notify the tenant of the changeover and give details of the K G Hurst bank account into which rent is to be paid.
Part 2 of the changeover is for Lyn and one of the Property Managers to inspect the property and report back to you. Sometimes owners want to be present at the inspection and this can be a good idea.