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

It’s been another big month on the rent relief front with our core rent relief team working hard on ensuring that we have all of the documentation to qualify tenants and subsequently agreeing rent relief arrangements. Mostly we are arranging rent abatements for 2-3 months depending on the tenant’s and owner’s situation. Honestly, its astounding the amount of time it takes to agree each case. Again the biggest hold up is tenants providing appropriate paperwork including evidence of income prior to COVID restrictions, income after, Centrelink statement, separation letter, and if someone is self employed or a sole trader it’s much more complex.

It seems that companies are now in their second phase of decision making around retaining employees and we have seen several redundancies reported to us just this week. As you can imagine, these are in the events and hospitality sector.
The REI (Real Estate Institute) sent out a second survey to their property management membership last week which covered around 65,000 rented properties in the state. The percentage of rent relief request per portfolio remained consistent at 15%. Of the tenancies that qualified for rent relief, 64% were granted a rent reduction. The time period for relief was 25% for 1-2 months, 50% for 3 months and 25% for more than 3 months and up to 6 months. Most property managers expect more rent relief requests to be lodged and we are of the same view.

The NSW government passed another piece of legislation on 14th May which allows Covid affected tenants to apply to tribunal to break their lease with a maximum penalty of 2 weeks rent applied. That means they would pay rent until they return keys and then 2 weeks rent on top of that. They may of course ask for less and depending on the level of hardship, the member may award this. They can only access this option if rent relief negotiations fail or stall.

We are at tribunal next week with a tenant who has historically paid his rent late and is now 41 days in arrears. The application to tribunal was made 11 April and in the past we would have had a hearing within about 2 weeks. He has refused to provide legible documentation to demonstrate his loss of household income due to Covid so we have been unable to negotiate an outcome. We have applied for an eviction so will let you know how that goes.

Some polar opposite results are occurring in the leasing space. Yesterday we did our first open at a three bedroom apartment in Coogee at $1,100 per week. We had 54 enquiries, 20 people through and 3 applications. We rented the property last year at $1,200 per week and had adjusted the pricing in line with the market. We are hoping to secure an increased offer of $1,150 per week. We also took a deposit on a renovated terrace in Paddington at $1,450 per week which had leased at $1,500 per week last year. In the north we secured deposits in about a week on a couple of cracker three bedroom apartments, one at $1,300 per week and another at $1,250 per week. Conversely, we have a number of properties in the Inner West with low numbers through open inspections and offers coming in lower than the asking rent.

As I mentioned last month, the vacancy rate on our portfolio and in the market generally has risen due to properties not coming onto the market until previous tenants have vacated. Don’t forget that we are a month ahead of the REI vacancy rate. For April, the REI vacancy rate was 4.3% versus 2.5% the month prior. Our vacancy rate this month is 5.4% which is not surprising considering we are showing already vacant properties. We are showing all properties four times per week and at different times of the day in order to capture as many potential tenants as possible. In addition, every person that enquires is called to see if we can arrange a private inspection.

Let’s Rent

December 1.7%
January 1.2%
February 1.4%
March 2.3%
April 3.2%
May 5.4%
Six month average: 2.5%

REI Vacancy Rate Inner Sydney

November 2.4%
December 3.4%
January 3.1%
February 2.8%
March 2.5%
April 4.3%
Six month average: 3.08%

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.

Take care and stay safe.

Kind regards
Lisa

hello@letsrent.com.au
02 9555 4886

With the release of the new regulation late on Wednesday, we at Let’s Rent been working hard to plan how to best support our tenants and owners.

Here is a link to the Fair Trading website which explains the new regulation together with some flow charts and FAQ’s – https://www.fairtrading.nsw.gov.au/resource-library/publications/coronavirus-covid-19/property/moratorium

Its tough for many people out there right now. Jobs have been lost, hours have been cut, businesses have closed or been severely affected. How do I know this? Because we are speaking with tenants and owners in distress each day.

The government says that tenants in rent arrears and Covid affected cannot be evicted for 6 months; only tenants experiencing a loss in household income of 25% or more can access a rent relief negotiation process; tenants should keep paying rent and landlords should ask their banks for a break on their mortgage or access a 25% waiver or rebate on land tax. All that is true but how do we best navigate negotiations for all concerned?

Honestly, we are finding each tenant and owner situation different. The biggest barrier to progressing discussions right now is the provision of sufficient documentation to qualify tenants for the negotiation process. We get it. Not all employers are providing documentation and Centrelink is extremely backed up so you don’t know the level of financial support you’ll receive. So, we are trying to move ahead where possible with rent deferment and mutual agreements that can be signed off when we do received all of the supporting documentation.

Essentially, we need you to show what your income was previously and what it is now including any government support. For business owners, its the same. If you could complete the Rent Relief Form and upload your supporting docs that would be great. If you’ve already completed your form, you can upload any additional docs or email to admin@letsrent.com.au.

Owners really appreciate if you can contribute what you can to the rent right now. It helps us in negotiations too as well as minimising rental arrears.

Our position is to mediate the best an outcome under the new regulation and its not always going to suit all parties. Owners will offer less than what tenants expect. Tenants will expect more than owners feel they can manage. We need to get to an agreement that both tenant and owner can live with right now.

We’d like to thank you for your patience and understanding. It is very much appreciated and we are so heartened by the positive way in which both tenants and owners have responded to an unprecedented change to all our lives.

We need to find balance, compassion and understanding for each individual, family or household whether tenant or owner. So please, let’s work together.

Kind Regards
Lisa
hello@letsrent.com.au
02 9555 4886

It’s been a big week… I’m sure you’re all keen to hear our response to the new Residential Tenancies Amendment (COVID-19) Regulation 2020. Although it’s a bit of a mouthful, the document itself is just a few pages. Simple right?… I will say that we feel fortunate to have been given a way in which to qualify those requesting rental relief.

The New Regulation by Fair Trading Regarding COVID-19

I’ve copied the link to Fair Trading’s explanation which also includes a couple of flow charts which does make it look relatively simple. https://www.fairtrading.nsw.gov.au/resource-library/publications/coronavirus-covid-19/property/moratorium

The New Coronavirus Regulations Simplified:

  • To qualify for the right to enter into rent relief negotiations, a tenancy must demonstrate that the household has experienced a loss of 25% or more in household income as a result of COVID-19.
  • For those who meet this criteria and agreement is reached between owner and tenant as to how rent will be paid, there is a 6 month moratorium on an eviction due to rental arrears.
  • There is an interim 60 day stop on owners issuing termination notices or applying to NCAT for eviction orders due to rental arrears, where tenants meet the COVID-19 affected criteria. This interim stop is to allow time for owners and tenants to be able to establish the amount of financial support they will receive and for good faith negotiations between owners and tenants to occur.
  • Where agreement cannot be reached, either the owner or tenant is able to make a complaint to Fair Trading who will then try to mediate an outcome. Fair Trading has no power to make a binding ruling so if this fails, the next step would be to attend NCAT.
  • Tenants who do not qualify are still under the same legislation as they were previously. We are able to issue a termination notice when rent is in arrears by more than 14 days and a tenant can be evicted as a result but this must be ordered by NCAT. Of course an application for hearing needs to be made to NCAT and subsequent hearing would take place.
  • Rent continues to be due and payable unless a mutual agreement is reached to reduce the rent either by abatement or deferment.
  • The regulation extends the notice periods for certain other lease termination reasons to 90 days. Examples would be to terminate a tenancy at the end of a lease or a terminate a tenancy on a periodic agreement or for a breach of the agreement other than non-payment of rent.
  • At any time owners can still apply to the Tribunal to take possession of a property if they are suffering undue hardship.

Complications with Rental Tenants

One of the biggest issues right now is that the money is still not flowing from Centrelink and therefore we are unable to establish if a household qualifies for rent relief negotiations. We are assuming that they will and commencing negotiations but will only be able to confirm any rent relief agreement when the proof of 25% reduction in household income is provided. In the meantime, we are asking tenants to pay what they can, and as such any unpaid rent becomes rental arrears which is required to be paid. That may change if for example a rent abatement is agreed. In this case, the tenant would not be required to pay an agreed sum of rent.

Government Support For Property Owners

It is clear when reading government announcements that they expect owners to approach their lender to freeze payments on their mortgage for a period of time in order to be able to offer rent relief to tenants. In addition, landlords will be eligible for a land tax waiver or rebate of up to 25% if they pass the saving on to tenants in financial distress. This doesn’t appear to amount to much since only 16% of landlords in NSW pay land tax.

Landlord Insurance

We are concerned that some landlord insurance policies will not respond where a tenancy ends and rent is still outstanding. Normally we have to issue a termination notice when a tenant is 15 days or more in arrears and apply to Tribunal for an eviction. With the interim stop on issuing termination notices, this creates a gap that may be used by an insurer to decline a claim. Some insurers have announced that a termination notice is not required for a claim to progress. We await responses from other insurers as to how they will manage this but our understanding at this stage is that we must show firstly if the tenant qualifies or does not for rent relief negotiations. Then we must follow a process to mitigate any loss. We have just a few tenancies at the moment where they are more than 14 days in arrears so if your tenancy is one of those, we will have contacted you already.

Some Good News

Despite the government and media warning of rental properties with no tenants and no rent being paid, we have good enquiry on available rentals generally. Our leasing team have done an exceptional job adapting to the changes and in fact this week we were able to secure deposits on 8 properties. I’m not saying that rental prices have not been affected but for properties that are new to the market or being relet, there are tenants available.

We’ll contact you if your tenant has approached us for rent relief to discuss the information we have at that time and what the next steps might be. Each situation is different. We have been contacted by some tenants to let us know they are ok and will continue to be able to pay rent. We’ll let you know if this happens too.

The team and I would like to thank you all for your support and understanding in these difficult times. As you can imagine, due to the sheer volume of communication we are dealing with, our response times are a bit slower than usual. That said, please feel free to call us if you have any questions or concerns.

Kind Regards
Lisa
hello@letsrent.com.au
02 9555 4886