Can I Justify a Rent Increase?
The cost of outgoings associated with property investment have been on the rise, so naturally you want to make sure you’re getting a fair market return on your property.
In Greater Canberra over the last 12 months average lease prices have risen by 14.4% for houses and 4.4% for apartments, so does that mean you should be returning more?
There are a lot of items to consider when pricing your rental property. We look at the data on a macro and a micro level to determine a fair and reasonable price. Recent lease results, anticipated future demand and stock levels, likely demographic and their income, versatility of the floor plan and the general condition of the property are all items that need to be taken into consideration to arrive at a fair market price.
Vacancy rates act as an excellent insight into tenant demand. At the moment in Greater Canberra, these vacancy rates are at a historic low (0.8%) and we’re coming into a competitive time of year for tenants fuelled by school holidays, work contract change-over and the new university year.
The goal should always be to attract a great tenant at a fair and reasonable price. If your property is in good repair and you have a proactive agent working for you, this is an excellent time to warrant an increase.
The following is an example of the difference a rental agent can make to your return- just by reading the data.
- 4 Bedroom House; Inner South. The former property manager had the property leased at $650 per week for the last 18 months. They advised the owner the tenants were vacating and they could not warrant a rental increase. The owner engaged my company, Ashby Partners Property Management, for a second opinion. After looking at the area and the freely available property data, I determined we could achieve a $50 per week rental increase. A result was reached within 48 hours of engagement – that’s an increase of 7.7%.
To find out why so many landlords are making the switch to Ashby Partners Property Management, please phone me on 0408 240 044 or email [email protected]
Founder and Director of Ashby Partners Property Management.
Sources: ABS & SQM