The keys to your new investment property are in your hand. How to get the best returns for your investment? Finding a tenant to generate rental income is key.

What should you consider when selecting a rental agent for your investment property?

This article looks at some of the services you should expect from a professional rental agent.

How much should the rent be?

As a private landlord, there are no limits to the amount of money you can ask tenants to pay as rent. The goal is like any other business: maximising profit and minimising risk. It may be tempting to make the price too high, pricing yourself out of the market. Alternatively, you may ask for too little rent, not getting the full potential from the property.

A real estate agent should have knowledge about which markets could support more affordable rates due to their proximity to transport hubs, for example, as well as how desirable different types of housing might be depending on location. They can advise on the current market rate and the best likely rent for your property.

Advertising the property

Advertising for a tenant for your property may be difficult because it is unknown territory for you. However, there are ways to make the search less strenuous and more fruitful as well! You can ask friends or family if they know of anyone looking for available properties. Facebook Marketplace often has posts with potential tenants and rentals available. Browsing these listings, or advertising there could also help find potential renters. Try placing an advertisement in the small ads section of your local newspaper.

There is a whole industry designing content for advertisements. If you are going it alone, look at successful adverts for similar properties to yours. See the wording, how much of a description to include. Are there photographs?

Instead of spending hours and hours scouring classified ads and searching the Internet, a rental agent will do this for you, saving you a lot of time. A professional agent will have template advertising flyers or a website displaying properties available to rent. They may already have a list of potential tenants seeking properties on their books.

A professional established rental agent will have a database of potential tenants and could potentially lease without advertising!

Screening of applicants

Screening potential tenants can be difficult for private landlords. It seems simple to trust your instincts if you get on well with a potential tenant, but a screening process is important.

A good real estate agent will ask for documentation to indicate the tenant earns enough money and is trustworthy before they sign off on them as your newest renter. This could be something like payslips from recent jobs or bank statements showing steady income over time suggesting that the tenant could afford to pay the rent for the duration of the lease. References from past landlords or employers will help to provide assurance the tenant is of good character and will care for your property.

This process aims to guarantee an investment income for you while also protecting the long-term value of your property.

The lease agreement

The lease agreement makes up your contract with the tenant. It should specify how much you will charge them and when it must be paid. You should call out when rent reviews will take place. The contract also describes the term of the lease and what happens if they wish to leave before their term expires.

The lease agreement will confirm the details of the security bond. You must specify exactly how much the bond is and under which conditions you may refuse to repay part of (or all) the deposit.

The lease agreement must be watertight! It is a legally binding document that helps guarantee your investment income. Once signed by the tenant and the landlord, the lease, and any related documentation are subject to the NSW Government’s Residential Tenancies Act. The Act details the legal obligations of the landlord and tenant and lists mandatory inclusions for the lease agreement.

An experienced rental agent will have drawn up many lease agreements before. They will have standard templates with the normal inclusions, as discussed, above. It is highly recommended that an expert produces this vital contract for you.

Let’s Rent – A better way to rent

Let’s Rent will handle the whole process for you. Our friendly value for money approach is designed to get you the best possible tenant paying market-rate rent.

We will conduct a rent appraisal, free of charge, whether you decide to partner with us or not. We advertise your property on our own listings, which are often the first point of contact for tenants seeking rental properties.

Many of our team are property investors and we understand how important tenant screening can be. We obtain documented proof of ability to pay the rent and obtain references to help ascertain good character.

Our lease agreements always confirm that rent must be paid by direct debit and we have zero tolerance for arrears. This means the tenant won’t forget to pay and helps generate reliable income for you.

Why not find out, today, what your property income should be. Contact the friendly team at Let’s Rent to arrange a free rent appraisal.

For more information

The NSW government announced new legislation in relation to Covid affected tenants and landlords yesterday. The following includes a summary of the changes.

Moratorium on evictions for Covid affected households

A new short-term moratorium on evictions is now in place. Tenants who cannot pay their rent in full because they are impacted by the recent COVID-19 outbreak cannot be evicted between 14 July and 11 September 2021.

To be eligible for the moratorium the tenant must:

The NSW Government encourages landlords and tenants to negotiate an agreement in the event the tenant is impacted by COVID-19, as above. To ensure that the landlord can claim financial compensation NSW Fair trading recommend the agreement be documented using their template.

What are the options for Landlords?

Fair Trading suggests you consider the following agreements with COVID-impacted tenant.

Please note, that there is no requirement for landlords to enter into rent relief negotiations.

Financial support for landlords

The ‘Residential Tenancy Support Payment’ has been set up to provide financial compensation for landlords who have documented an agreement for rent relief for their COVID-affected tenants from 14 July 2021.

Landlords will be able to claim up to $1500 per tenancy or the reduction that was agreed with the tenant, whichever is lower.

More detail is available on the NSW Fairtrading website.

As always, I will do my best to answer any questions you may have. I am in close contact with the REI who are assisting with explanations and clarifications with Fair Trading.

Take care, stay safe and mask up!

For more information

The global pandemic is still with us. The ‘Delta variant’ is running rampant in parts of NSW and the premier has announced the current lockdown is expected to continue until the end of August.

I Just wanted to say a big “thank you” to all those clients who have reached out with kind words and support. It means so much to the team and me! We hope you and your families are doing ok in the current circumstances and can find some positives to focus on. The sunshine and blue skies have been amazing this week!

Eviction Moratorium and Rent Relief

No changes from my email last weekend but to recap on the basics see below.

To be eligible for the 60-day freeze on evictions:

The Residential Tenancy Support Payment provides some financial support for landlords

More information is available on the NSW Fairtrading website

Lockdown and Viewings

We continue to show prospective tenants through our properties one at a time ….. As you can imagine, it is very time consuming but viewers are more qualified. We’re seeing good numbers coming through well presented, well-priced properties at the beginning of each campaign. There are definitely significant numbers of people on the move who need to find a new home. We are calling all enquirers to arrange an inspection time to suit them. Some tenants continue to refuse access during the lockdown and this is understandable. This number has increased from last month as cases have increased.

New Tenancies

The restrictions on construction have caused delays with the commencement of some new tenancies but they all seem to be back on track now. It seems surprising so many renovations are going ahead. Certainly, some industries have benefited from Covid and I imagine people in those industries are cash-rich. Others may benefit from the fact money is so cheap at the moment. Of course, no overseas travel helps with savings too!

Market Conditions

We were super busy in July and took 20 deposits on new tenancies. We are leasing some properties off-market and have a good database in most categories. Of course, it’s still necessary to market most properties and numbers are high at the beginning of a campaign if priced right. Presentation as always is important.

Vacancy Rate

Our vacancy rate increased in July to 2.9% but this was due to vacant new business properties. Out of 15 vacant properties, six of those are new to our portfolio. The REI vacancy rate for June increased to 4% from 3.3% in May. No doubt the REI vacancy rate in July will increase due to existing tenants not allowing access to show prospective tenants through.

Let’s Rent

REI Vacancy Rate Inner Sydney

Your Property Management team continues to work for you whether we are in lockdown or not. We are all very much looking forward to getting outside and back to normal life. It seems likely that the ending of the current lockdown will coincide with the start of Spring. Hopefully, we’ll all be out and about and back to business in some warmer weather very soon.

Finally, thank you to those of you who have sent questions through! I really do love to hear your burning property management questions. Don’t forget, we are always happy to check out any investments you may be interested in purchasing and provide a rental appraisal together with feedback on rentability.

For more information

As we wave goodbye to one of the strangest years in modern history, we start to look forward to what 2021 might bring. And while we don’t know exactly how the property market will react in the next year, we’ll be focusing on keeping your property occupied.

An empty investment property is one without return

You’ll know that the vacant time between tenants could have you thousands out of pocket every month. And in an environment where career, business and working arrangements are in flux, minimising your vacancy rates could provide a welcome level of stability and certainty in 2021.

Attracting and retaining tenants

The best way to keep your property tenanted in the long term is to find high quality tenants and to make it easy for them to enjoy living in your property. While people will still move out to relocate or find new work opportunities, they’re much more unlikely to leave when they enjoy where they live and they feel heard and respected by the property manager they interact with. The other key to keeping your property tenanted is to stay competitive with rent that reflects the market rate. Sydney saw vacancy rates and dropping rents in the second half of 2020, particularly in the city and eastern suburbs. So for some owners – in some areas – there may be a balance to find between revenue and occupancy over the course of this year.

Finding the balance

We know you’ll want to find the right balance between getting a decent rental return and keeping your property tenanted. Keep rents too high, and tenants may choose to go elsewhere. Drop them too low, and you could keep a tenant but lose the full value of your return. Here’s where we can come in. Our dedicated property management services in Sydney are focused in the inner west and eastern suburbs. We’re speaking with tenants and potential tenants in these areas every day, so we have a good hold on what’s in demand, what has less competition and what might be around the corner. We proactively hold regular rent reviews to help you find the ideal balance.

Good residential property management will help you keep your investment property tenanted through a number of areas: polished and professional listings, a rental process that’s frictionless for everyone involved, robust processes around payment and property repairs, and solid advice. If you are looking to find the right provider to support you in 2021, then consider speaking with the team at Let’s Rent.

As this year draws to an end we would like to thank everyone all for their support and patience in difficult times and new paradigms. We are very grateful for the understanding and warmth you have offered us and for this we offer our heartfelt thanks.

The shift in market conditions has been dramatic and a challenge for us both. Our team has worked tirelessly to ensure that your properties are leased as quickly as possible by shifting to more tenant interactions and more inspections.

Our vacancy rate for December has come in at 1.9%, down from 2.9% last month and a high of 5.4% in May. The REI Vacancy rate for November was 4.6% down from 5.8% in October which was the highest for the year and matched the rate in June. The rate for middle Sydney was 4.4% in November with outer Sydney falling to 1.8% from a high this year of 4.3% in July.

For 2021 we hope for better conditions in all spheres of life. We wish you all the best for the year ahead and we look forward to working with you once again. Happy New Year.

Let’s Rent
July 3.0%
August 2.8%
September 3.6%
October 2.3%
November 2.9%
December 1.9%
Six month average: 2.7%

REI Vacancy Rate Inner Sydney
June 5.8%
July 5.3%
August 4.7%
September 5.5%
October 5.8%
November 4.6%
Six month average: 5.3%

Conditions have been pretty much the same as October with inconsistent numbers and interest in rental properties. The one bed and studio market in inner Sydney is still experiencing an excess of stock which is putting pressure on rents. The three and four bed market has picked up with more enquiry from tenants ready to move. For example, we leased 311 Annandale Street, Annandale in record time at $950 per week with a tenant moving in just 5 days after we commenced marketing.

Our vacancy rate increased slightly from 2.3% in October to 2.9% this month and the REI October Vacancy Rate came in at a whopping 5.8%. The six month average for the REI Vacancy Rate is at 5.35% compared to Let’s Rent at 2.82%. We continue to engage strongly with potential tenants and we are showing vacant properties 4 times per week. We really think this pro-active approach is working. We picked up a couple of vacant properties in Erskineville this month which were vacant for 2 and 6 months respectively! Suffice to say the marketing was of poor quality and the previous agent was not showing the properties unless an enquiry came through. We refreshed the marketing with professional photographs including virtual furniture and enquiry came in immediately. Both had tenants commencing leases within 2 weeks of us taking the properties on.

Let’s Rent
June 2.3%
July 3.0%
August 2.8%
September 3.6%
October 2.3%
November 2.9%
Six month average: 2.82%

REI Vacancy Rate Inner Sydney
May 5.0%
June 5.8%
July 5.3%
August 4.7%
September 5.5%
October 5.8%
Six month average: 5.35%

Open inspections have been a mixed bag with a townhouse in Maroubra showing strong interest from renters. Good quality properties are also renting well with a three bedroom terrace house with garage in Paddington renting at $1,600 per week one day after settlement with the lease commencing 3 days later. We are seeing Australians returning home and this is adding to demand in some suburbs and price ranges, mostly high end.

Rents close to the city continue to be those most under pressure below $1,000 per week. I’ve set out a vacancy rate snapshot below from SQM Research’s data with September 20 versus February 20.

Alexandria 5.6% vs 2.9%
Rosebery 5.6% vs 2.8%
Balmain 2.8% vs 1.6%
Paddington 4.6% vs 2.1%
Neutral Bay 4.9% vs 3.1%
Pymble 5.6% vs 5.3%
Cronulla 1.6% vs 2.3%
Manly 1.5% vs 2.1%
Newport 0.8% vs 2.8%

This tells the story of people moving away from the centre of the city to beach suburbs like Manly, Newport and Cronulla with those suburbs with an oversupply of new stock having been hardest hit.

Our vacancy rate is edging lower again which we are super pleased about however we are still experiencing much higher vacancy than a year ago. Our vacancy rate came in at 2.3% compared to 3.6% in September. On the other hand the REI vacancy rate climbed to 5.5% in September compared to 4.7% in August.

We are hopeful that New Zealanders and Australians returning home will help soak up stock in inner Sydney suburbs.

Let’s Rent
May 5.4%
June 2.3%
July 3.0%
August 2.8%
September 3.6%
October 2.3%
Six month average: 3.2%

REI Vacancy Rate Inner Sydney
April 4.3%
May 5.0%
June 5.8%
July 5.3%
August 4.7%
September 5.5%
Six month average: 5.9%

The Big news for this month is that the government decided to extend the Covid legislation in relation to residential and commercial tenancies by 6 months. It was due to expire mid next month so will now expire mid-March 21.

There are several points that we need you to be aware of. As many of you may know, JobKeeper and JobSeeker were reduced last week and this may lead to further requests for rent relief. This is of course one of the effects of the extended legislation. When tenants contact us, we will follow the same process we followed in the first phase which will be to request documentation to demonstrate net loss of household income of 25% or more. This usually means payslips prior to the shutdown in March and recent payslips.

The second thing is that the extended notice periods will continue to apply. The main one is that we must provide a tenant with 90 days’ notice to vacate at the end of their lease.

Market conditions continue to be challenging and areas with new stock are the hardest hit. The REI vacancy rate declined to 4.7% in August from 5.3% in July. This mirrored the decline we saw in our vacancy rate in August however the rate increased in September to 3.6%. Our lowest vacancy during the Covid period was June at 2.3% and the highest was May at 5.4% which reflected the change in our ability to show properties that were tenanted.

Let’s Rent
April 3.2%
May 5.4%
June 2.3%
July 3.0%
August 2.8%
September 3.6%
Six month average: 3.3%

REI Vacancy Rate Inner Sydney
March 2.5%
April 4.3%
May 5.0%
June 5.8%
July 5.3%
August 4.7%
Six month average: 4.6%

In the last four weeks, we’ve seen an increase in stock with a general rolling over of tenants into new properties as their leases expire. Yes, they are looking for value and an increase in amenity. Those who are out and about are primarily those in employment rather than people who are struggling with reductions in wages.

Clearly, when leases are coming up for renewal, the first thing tenants are asking for is a reduction in rent. We are managing these requests with care and consideration around maintaining the tenancy without reducing rents to below-market levels.

We have done an incredible job for our clients in maintaining the percentage of tenancies on lease which is a smidge over 89% at the end of July. The high number of tenancies on leases has provided our clients with much greater security in tenure as well as maintaining rental levels. To put this into context, many agencies only have 50-65% on their tenants on leases, the rest are on month to month leases which allows tenants the opportunity to vacate at any time with 21 days’ notice.

The May REI vacancy rate for Inner Sydney increased from 5.0% in May to 5.8% in June in contrast to Let’s Rent’s vacancy rate being 5.4% and 2.3% respectively. Our vacancy rate for end of July has crept up to 3% which is above the level considered to be a balance between owner and tenant interests which is 2%. We are doing our best to keep it as low as we can in these challenging times.

Let’s Rent
February 1.4%
March 2.3%
April 3.2%
May 5.4%
June 2.3%
July 3.0%
Six month average: 2.4%

REI Vacancy Rate Inner Sydney
January 3.1%
February 2.8%
March 2.5%
April 4.3%
May 5.0%
June 5.8%
Six month average: 3.9%

Take care and stay safe.

Kind regards
Lisa

hello@letsrent.com.au
02 9555 4886

Happy EOFY!

We’ve entered this month on a relatively positive note for property management.

Thankfully we are seeing the rent relief requests and negotiations easing which we are all finding a relief…. I know many of our clients have found these negotiations challenging too so thanks so much for your understanding and patience.

I talked about redundancies last month but no new ones popping up so that is certainly a positive sign for the time being.

The 60 day stop on termination notices expired 13th June so we are now able to issue termination notices for non-payment of rent even in situations where tenants have been Covid affected and been offered rent relief. There is still the requirement to pay rent under the residential tenancies agreement so those tenants who have chosen to pay short or not paid at all can now be taken to tribunal for redress.

As a result, the wait time for mediation at NCAT has pushed out to 6 to 8. We are doing phone hearings which is actually working well. My experience is that members are actually being a bit more sympathetic to landlords and even property managers too!

At Let’s Rent, we have smashed our vacancy rate by nearly 50% to 2.3% this month!

I must congratulate Lochie who heads up leasing and Nik who takes care of our new business. They have been driving the number of inspections and pushing applications through quickly. We really hope to be letting you know next month that vacancy is lower again.

The May REI vacancy rate for Inner Sydney increased as expected and finished up at 5%. Conversely the REI vacancy rate in Outer Sydney declined from 3.1% in April to 2.7% in May. My REI colleagues are from varying geographical areas and the feedback from them is that regional and outer Sydney areas are doing ok. Conversely the vacancy rate close to the city is the highest. Sydney CBD has the highest vacancy by far at 14.8% according to SQM Research.

Let’s Rent

January 1.2%
February 1.4%
March 2.3%
April 3.2%
May 5.4%
June 2.3%
Six month average: 2.6%

REI Vacancy Rate Inner Sydney

December 3.4%
January 3.1%
February 2.8%
March 2.5%
April 4.3%
May 5.0%
Six month average: 3.5%

Thank you to those of you who have sent questions through! I really do love to hear your burning property management questions.

Don’t forget, we are always happy to check out any investments you may be interested in purchasing and provide a rental appraisal together with feedback on reliability.

Take care and stay safe.

Kind regards
Lisa

hello@letsrent.com.au
02 9555 4886