With the current demand for rental property, we often hear the questions – “How much will my property rent for?”, “Should I increase the weekly rent? and if so, by how much?”
These are questions that we hear and provide appraisals and advice on every day.
So… How much will my property rent for?
Supply and demand determines the achievable rent of a property. When the demand of tenants is high and there are limited properties for rent, the weekly rent achievable can increase. The best way to determine the rent is by conducting a Comparative Market Analysis (CMA) on what other similar properties are renting for in the area. This research can be undertaken by looking at public rent websites.
Supply and demand can fluctuate on a weekly basis, so pricing your property correctly and providing the facilities that tenants are seeking can mean the difference between having your property occupied or sitting vacant for weeks.
Also, if you are renting your property an unrealistic rent can lead to long-term vacancy periods that can have a greater financial loss to you than the extra $40 per week over-priced requested increase. Just consider, if you have your property rented out for $300 per week for 52 weeks of the year, this equates to $15,600. If you overprice and it takes 7 – 8 weeks to find a tenant at $340 per week, you would have earned $15,300 or less for the same period.
So beware of the price trap.
Should I increase the weekly rent? and if so, by how much?
Our agency recommends regular rent increases (at least one per annum) as it becomes an expectation of the tenant and avoids high increases if one has not been implemented for some time in accordance with the market. However, if they have been exceptional long-term tenants and the rent increase could result in the tenants having to leave, it may be a consideration to weigh the pros and cons of having secure tenants in comparison to possible vacancy periods and additional advertising costs.
If you have any queries regarding renting your property please contact our property management team on 66462400.