Smart Property Investment spoke with a leading industry expert to find out what investors need to know about rising vacancy rates and how a property manager can help you negotiate the new rental landscape.
“If you look across our real estate network [Starr Partners], we manage over 12,000 properties. This time last year our rental vacancy rate was around the 1 per cent mark, now it's somewhere around 2.5 per cent. Speaking to people across the industry as a whole, it’s a general theme. We're not slacking, we're not working any less, it's just the market,” said Doug Driscoll, Starr Partners CEO.
But Mr Driscoll insists it’s not a crisis, it’s a chance for investors and their property managers to educate themselves and become savvier in the rental market.
Mr Driscoll said it’s important for property managers to work with their landlords on education, addressing topics like how the area market is changing and what tenants in the area are looking for.
“[Property managers] can minimise the damage by continually educating landlords, continually giving them a better understanding of what else is out there, what's happening to the price of rents across that suburb, or Sydney as a whole. What tenants are looking for [in that area]. Is it something like a gleaming new bathroom, is it the latest aircon unit – whatever,” said Mr Driscoll.
Investors should communicate with their property managers if they are concerned about rising vacancy rates in their area; a property manager should be able to give you more information about how this will affect your property and what you can do to put yourself in a better position in the market.
Mr Driscoll said the vacancy rate rise has been on the horizon for a while, especially with the amount of new developments hitting the marketing in capital cities around the country, but it has come slightly earlier than he anticipated.
Despite this, he thinks it’s important for agencies and landlords to react now, before the problem escalates.
“In my opinion they will continue to creep up, this isn't a blip, this is the new norm as we head into 2017 so get used to it and adapt to it and understand what you can do internally to address the new landscape,” said Mr Driscoll.