We will always strive to get you the maximum rent possible in the market conditions. To do this we consider the following factors in our assessment and recommendations:
- Demand – Is there currently a high or low demand for rental properties generally and locally to the property. This can be seasonal and affected by a number of factors.
- Supply – What properties are currently available in the local area and how do they compare to the property in terms of location, features and condition.
- Comparable Rentals – What are existing rental properties achieving in the area and within our own management pool.
We will provide you with a Rental Market Analysis Report with example properties and our recommendation for rental amount. We will usually provide you with a relatively narrow range and suggest commencing at the higher end of that range in the first instance and then adjusting if required based on the level of enquiry.
Setting the correct market rental is important for getting your property rented as soon as possible. Although we provide a recommendation, we will follow your instructions so if you decide you want to list the property at a higher or lower amount, we will endeavour to get the property rented as soon as possible.
Risk vs Reward
It’s often useful to calculate the risk vs reward when considering whether to spend longer achieving a certain rental or reducing vacancy rate. The following page provides an example that illustrates this.
Example:
If I want $550 per week for my property but the market analysis is telling me will more likely achieve $520 per week.
Situation 1:
Property is advertised at $550 per week
Vacancy period before finding a tenant at this level is 5 weeks (note, this doesn’t always happen, the rent may still need to be reduced)
Total loss is $2200
Situation 2:
Property is advertised at $520 per week
Vacancy period before finding tenant is 1 week
Annual loss based on the ‘reduced rent’ is $1560
The good thing about setting rent is that the market will usually provide immediate feedback in the form of enquiry levels and interest levels for the property. Your property manager be able to guide you on setting and adjusting rent where required.
