VACANCY PERIODS

MINIMISING POTENTIAL RENTAL LOSS

Forecasting the economy and investment market has been challenging and unpredictable for many nationwide, with constant interest rate rises, elevated rents, a shortage of affordable housing and a strong rental market in securing tenants. However, according to recent data research*, we are now starting to see a slight rise in the national vacancy rates for the first time in 18 months. Landlords need to be mindful of these changes to monitor long-term budgeting and the financial management of their investment income.

If your property becomes vacant, there are smart steps that you can take to minimise the potential of a vacancy period.

Know the vacancy rate and market conditions.

As an astute investor, you must keep up-to-date with the current rental market and know the vacancy rates, trends and fluctuations. Vacancy rates are expressed as a percentage and are an insightful indicator for monitoring supply and demand in rental properties. Steady vacancy rates are considered between two and three per cent. A low vacancy rate (below two per cent) is viewed as a landlord market and is associated with rising rents and a decline in the time it takes to secure a tenant. A high vacancy rate (above three per cent) means there is a large portion of rental properties available where rents fall and there is an increase in the number of days the property is advertised for rent. The latest national vacancy rate is on an upward trend at 1.2 per cent, attributed to increased shared rentals to reduce rental costs and more people buying properties.