In areas with a building boom, you run the risk of an oversupply of rentals. So how can landlords in Sydney’s Eastern Suburbs overcome these rental market challenges and come out on top?
Sydney’s rental market is currently experiencing some challenges, due in part to a potential oversupply of properties in the city’s development hubs, as well as a quiet rental market. We take a look at what’s behind these issues, as well as how landlords can maintain demand for their rental property in a competitive market.
One of the major challenges currently facing Eastern Suburbs landlords is the influx of new rental properties, particularly in high-growth areas or development hot spots, where apartment complexes seem to be popping up all the time. While this is good news for renters looking for more choice, it does pose some difficulties for investors who need to make sure their rental properties stand out among the brand-new units on the market in order to reduce vacancy rates.
Two areas where we’re seeing the effect of this are around Kensington and Kingsford, as both have easy access to the University of New South Wales, Prince of Wales Hospital and the new light rail, making them attractive to property developers seeking locations for brand new apartment buildings.
The effect of this development boom can be seen in statistics from Real Estate Investar, where vacancy rates in particular are already shown to be higher than we might expect for such sought-after rental locations. There is some good news in the rental yields and median weekly rent numbers, but these figures obviously matter less if a rental property is vacant:
- Vacancy rate: 3.06%
- Rental yield (unit): 3.59%
- Rental yield (house): 2.08%
- Median weekly rent (unit): $600
- Median weekly rent (house): $1000
- Vacancy rate: 2.28%
- Rental yield (unit): 3.84%
- Rental yield (house): 2.2%
- Median weekly rent (unit): $580
The slightly slower rental market we’re seeing at the moment also means there are fewer renters looking for new homes, making it a little more difficult to fill a vacancy than it has been previously.
How Your Property Manager Can Help In A Tough Rental Market
If you are not doing so already, now is the time to work with your property manager on ways to keep your property happily tenanted. Our specialist property managers are well across the current issues facing the market and are already working proactively with landlords on strategies to keep their investment properties at the top of the market, despite the increasing competition.
How To Keep Your Rental Property In Demand: Renovations, Marketing and Rent Reviews
The good news is there are many ways to make improvements to your rental, to draw more interest and reduce its time spent vacant. These include renovations, rent reviews and marketing.
The focus of any renovations should be on making the property feel modern, well-equipped and good value for money, in order to compete against the new apartments on the market.
We highly recommend speaking with your property manager before committing to any renovations in your investment property, as they’re the experts on what tenants are looking for in your area. Their suggestions can cover both repairs and ways to add value, such as:
- Re-painting internal walls and any outdoor painted surfaces if needed
- Replacing outdated kitchens and bathrooms, or simply updating fixtures and fittings
- Replacing old carpet or polishing floorboards for a fresh new look
- Completing all minor repairs
- Replacing old curtains or blinds
- Adding value through extras like air-conditioning, a dishwasher, built-in robes, or skylights in dark rooms
A professional property manager can also review your weekly rent to ensure it’s fair and competitive. If it’s priced right, it’s less likely to linger on the market waiting for a tenant.
Finally, when it’s time for the property to go on the market, investing in a proactive marketing campaign, including professional photographs, copy and prominent website listing, will ensure your property is front-and-centre for prospective tenants. Your property manager will also be able to make recommendations for the best marketing strategy for your rental.
Need Help Managing Rental Property Challenges In Sydney’s Eastern Suburbs?
Contact our experienced team of specialists today for advice on your investment property.