Thursday, September 22, 2016

The ‘break-lease plague’… investors it’s time to build your immunity!

Attracting and maintaining quality tenants is quickly becoming the Holy Grail to investors as we unfortunately see lease breaks on the rise across the country. Speaking with a leading Brisbane agent earlier this month, it appears Adelaide is not the only state affected.

So why is this the case? In markets such as Adelaide and Brisbane it appears to be a 
dual attack.

The first component is interest rates. With interest rates being so low, many tenants are realising that the gap between the cost of renting and the cost of buying is becoming smaller. This is not as prevalent in the larger cities, such as Sydney and Melbourne, as the average purchase price remains at historical highs. However in a market such as ours, we are seeing a number of tenants making the move to home ownership.

The second component is tenant-buyers. This winter the Adelaide market has been starved with extremely low numbers of properties available to purchase. During this period many sellers have turned to renting as they simply could not secure a property in line with the sale of their home. They are now looking to re-enter the property market as we head into the busier spring period.

So, as an investor, how can you build 
your resilience?

As investors, sometimes we can forget that the property is actually going to be someone's home. Many tenants are looking for a place where they can relax at the end of the day, as well as enjoy on the weekends. Our team are seeing first hand how features such as an open plan living room, outdoor entertaining area or an ensuite in the master bathroom can make a big difference.

Here are some practical tips to get you on 
your way:

- Start small. Look for any item in the home that could be updated. This includes appliances such as a dishwasher, ceiling fan or air-conditioner, this doesn't need to be reverse-cycle, even a wall unit can make a big difference!

- Replacing things that look 'tired'. Items such as old curtains, tattered blinds, light fittings or cupboard doors.

- And if you want to go one step further... a coat of paint or laying fresh carpet will instantly make the home feel brand new. 

These are just a few tips that can help investors transform the look of a room and make a property feel like a home... whilst also improving its longevity and value.

This spring season steer clear of the 'break-lease plague', and be sure to put your property's best foot forward to help secure and maintain a quality tenant. For more information on how you can build your immunity, call our team today!

Suzannah Toop

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