Friday, October 06, 2017

Poker face... It’s lease renewal time.

Typically between now and Christmas the majority of leases will be coming up for renewal. This can leave many Landlords unsure on what hand to play; and the stakes can be high.

To help paint a clearer picture of the market, there are two key indicators that can help determine how bullish you should be with your rental property... and whether you should bet high and 'go all in'.

The first is vacancy rates. This is the percentage of the total available number of properties that are vacant at a particular time. This month the national Property Investor magazine showed that Prospect's vacancy rate is 2.0%, Norwood's is 2.5%, Parkside is 2.6% and Mile End is 1.4%... and across the state it is sitting
at 1.9%.

Our Property Managers are finding that metropolitan Adelaide is a 'hot spot' at the moment, so to us, these particular numbers were surprising.

Across our portfolio, Toop&Toop's vacancy rate is sitting at 0.43%, and has been below 1.0% for some time. Finding out your agency's vacancy rate, prior to confirming your new lease, will give you a good idea of the number of properties that may be competing with yours.

The second is time on market. The industry average days on market is sitting at 43 days. However, this will vary depending on where your property is located, and what your property offers.

Since July this year, Toop&Toop's average days on market have ranged from five days in Mile End, nine days in Prospect, through to 12 days in Norwood. The time on market for your area will provide insight into the number of tenants currently looking for a property, and what properties are moving quickly.

These two key pieces of information will help you understand the current market, and what kind of position you are in, prior to deciding to renew your tenant.

As a Landlord, making an informed decision is essential so you know whether the cards are in your favour.

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