Property Management 101 – Market Trends
When should I rent my Property and when should my Tenancy Agreement end?
Just like a sales market the Inner-City Brisbane rental market fluctuates throughout the year. Unlike sales though, there often isn’t as much flexibility when it comes to choosing when to rent a property. Most often a property needs to be rented because a home owner unexpectedly needs to relocate and isn’t ready to sell, or an investor has purchased a property and requires a new tenant at settlement. But Brisbane does have some typical rental trends and it’s important an investor owner understands what the market is doing to ensure their investment is best protected from vacancy and loss of income.
It’s no secret that the beginning of the year tends to be the strongest market for investors. This has been an ongoing trend for many years but really took off after the unfortunate Brisbane floods in 2011 which affected many inner-city suburbs. In an already hot market the added influx of tenants who were left homeless from the floods really changed the market. As the years go on Property Managers have really played on that time of year and it’s become common for a property to be strategically leased to end at this time of year.
The issue with this trend is the amount of stock to hit the market at one time. I’ve seen real estate offices that have close to half of their rent roll due to renew lease in January. This has created an oversupply as a result the last two years have shown a spike in Brisbane’s average vacancy rate to nearly 4% in Jan. It’s also interesting to note that Brisbane’s average vacancy rate this year was at its lowest in May which in the past has been thought of as a slow time for our market.
This information tells me a couple of important things – our market is changing and as an investor you need to know or have an agent that knows what these changes mean. Receiving the wrong advice will have financial effects to your investment.
While January may still be the best time for some properties, there are several important factors to consider. Here are some tips to consider when deciding when to rent your property, or when the lease should expire:
- Consider the type of dwelling your renting – the market for units, townhouses & houses are very different
- Is your property unique in some way? Will it appeal to a specific market and when is the best time of year to capture that market?
- The price of the property – Generally your target market will become more refined the higher the price
- School zoning – People will live in a property purely because of this
- The features the property offers – trying to rent a property with no fans or air con can be very difficult in summer!
- Do you own more than one investment, and have you considered the financial impact of having the leases end at the same time of year?
Stats provided by SMQ Research