Help - Why won't anyone rent out my investment property :-(

Hi, hoping you can all help me.  I have had my investment property (tri level townhouse) for 1 year now, the tenants have recently moved out and the real estate agent has re advertised it.  It has been advertised for the last few weeks now, the agent has taken a few groups in but no one interested so far.  The townhouse is situated in Varsity Lakes - Gold Coast.  Below is a link to the realestate.com ad.  If anyone has any suggestions to help, perhaps even with the wording of the ad or anything we can do to help get people in would be greatly appreciated.  Over 1000 people have viewed the ad, so can't understand why we are not getting much enquiry.  We have not increased the rent, the previous tenants were paying $390 and we cannot afford to drop this, we believe this is still competitive to what is out there.

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=404404032&f=0&p=30&t=ren&ty=&fmt=&header=&cc=&c=43681108&s=qld&snf=rbs&tm=1268132407

Thanks

Have you followed up on how interested the property manager is in taking people thru the proprty? Have you got  a friend who is able to 'mystery shop' for you? is the agent willing to show the property after hours or on weekends, whata re they saying to prospective tenants? the only real way to get a definitive answer is to have someone play the role of a prospective tenant, you may discover that the agent is not doing their job.

What is the street amenity like? is there major building or anytjing else to detract possible renters? How strong a demand is there for rental properties in the area?

just a few things to think about, good luck

cheers

Sonya

Hi,
Just to help you understand that you are not alone. I have just leased a house in the Gold Coast,  Ashmore and can tell you exactly the same thing happened to me. The previous tenants bought a house (FHOG) and there lease ended Jan 7th 2010. I did not want to be stuck renting my place out in early Jan (which I thought was a bad month) so I let the tenants out of there lease early on Dec 14th 2009. But the damn place did'nt get rented till Feb 6th 2010. I had over 1000 hits on the web and plenty of inspections but no one wanted to lease it. I was getting $425pw from previous tenants so advertised it for $430pw, but ended up with a 6mth lease at only $420pw.  I hounded my leasing agent nearly every day over it, but they could'nt explain it. On the day they leased it, I threatened to go to another Agent. Also my mate is currently trying to rent a house in Helensvale and his place has been vacant for 2 months now. It seems it's a renters market at the moment and I reckon it's because of the rush of the FHOG last year. Just another recent experience, I have a unit in Drummoyne NSW and it was renting for $950pw. I advertised it for $980pw and had 2 x applicants fighting over it. The day after my tenant moved out, the new tenant moved in. Unbelievable

Maybe you should look at getting a new property manager.

You say you can't afford to drop the rent, but dropping the rent $10/week ($520/yr) is better than losing 2 weeks rent ($780/year). It is a fine line to cross there.

Your property is interesting. Having 3 levels is a bit of a pain in the ass for someone who wants to rent. It is only 3 bedrooms so 3 levels seems like a bit of overkill.

Also you have to look at the vacancy rates in the area. Maybe vacancy rates are high in that area and tenants have a lot to choose from. This means you have to be more competitive and offer something that no one else offers.

As Dannyde said above, in places like Drummoyne in Sydney where vacancies are low it can be easy to rent out your property as soon as possible.

Good luck

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click Away

Personally I would go with a rent drop. We had one of ours on the market for the last couple of weeks at what we thought was reasonable market rent. We have decided to drop it as the limited amount of people through and even more limited applications. We have 3 TH's on a block and the two others rented leaving one vacant. Our PM was pretty confident but we made her put it down and now have had a few more people to chose from. Think about $20 or $30 a week and then think about $370 or $360 a week that you are losing. What is worse? Plus you can always put it up in 6 or 12 mths when the market picks up.

D

Work Smart, Not Hard.

Chelkin,
They are correct about a rent drop. I should of been dropping my rent by $10pw until I got it rented, but I waited 4 x weeks before I dropped the rent and this was on my suggestion not the Agents. I was confused like you as there was so many visitors looking at my web ad and viewing the place that I thought it should get rented. So many people were viewing my place that I gave the Agent permission to hand out the key so people could view it on there own as the Agent was so busy. Hence why I was'nt dropping the rent. Don't put all the blame on your Agent as it's a different market out there this year compared to last. It's a renters market right now on the Gold Coast. I don't think  GC Agents understand this and they don't tell you.  

Hello Chelkin,

Ryan makes some good points. There are houses available for what you are asking; BUT this does NOT mean it is the price. Another point; a vacant week is the same as rental discount. You can always try increasing the rent in 6months.

May I also suggest that you put it with other agents; this allows for walk-ins not just web traffic. How many is up to.

This form may assist you in identifying any faults with your property:http://www.propertycompass.com.au/2010/02/prior-to-settlement/

AA

I'd advertise myself and see what happens.  Put an ad in the paper somewhere for 50-100 bucks, and see if you can do a better job than your property manager. If you get plenty of inquiry, you know they're not doing their jobs.

Benjamin Csikos
Visit my new blog or youtube channel! - www.bencsikos.com - www.youtube.com/benanaman - benanaman@hotmail.com

If you really cannot afford to have it vacant for much longer then I'd most definitely drop the price. Your agent has 2 advertised openings this week, with one in the morning and one in the evening, and these times are clearly advertised on the internet.

Having been on both sides of the fence (an investor and a property manager for a real estate office) it is a bit of give and take from both parties. Everyone is so quick to slag off the property manager for not having the property leased, but in reality sometimes it is the landlord who chooses not to listen to constructive feedback from the P.M.

Markets change unexpectedly and sometimes a $10pw price reduction can be the difference between getting the home leased and having it sit there for 4 weeks hoping for that little bit extra.

As long as you include a clause in the lease allowing you the opportunity to conduct a rental review/ increase in 6 months, you can bump it back up to the $390 or maybe 395pw then. In the meantime you have $$$ coming into your bank account :-)

Best of luck - I hope you secure a tenant ASAP.

did it end up getting rented? nothing is showing up on the link

Maybe it'll be up tomorrow with cheaper rent?

D

Work Smart, Not Hard.

it was up this morning!

Regards,
YI

"Knowledge is Power"

rent out yet???

Anyone wanna rent mine? LOL!!!!! Nah kidding I think we are done! Please ignore hideously fugly letter boxes the builder put in they are now nice concrete ones (phew).

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=404391324&f=10&p=10&t=ren&ty=&fmt=&header=&cc=&c=64734430&s=vic&tm=1268201661

D

Work Smart, Not Hard.

Spoke to the agent today and they were supposed to drop the rent to $380, take the ad off and put it back on so it bumps up to the top of the list, I've just looked on the web and the stupid agent has taken it off and has not put it back on!!!!!  I could have possibly missed out on a potential tenant searching the web tonight, not happy grrrrrrrrrrrrrrrrrr.  Also the agent also said she had trouble letting people through the house as it seems the current tenants were not speaking to each other or something and could not seem to organise a time for people to go through that would suit the tenants which cost us a potential tenant who really seemed keen.  However, as they have moved out today, the agent has advised they can now show people through anytime.  Thanks for everybody's input too, much appreciated, a lot of tips I have taken on board.  Will post the link as soon as I scold the agent in the morning for this!!!!!!

I know with ours each time they have modified the ad it has been updated the next day. It might be back on first thing in the morning.

D

Work Smart, Not Hard.

Here is the updated link with updated rent and new wording, see how we go now

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=404456247&f=0&p=30&t=ren&ty=&fmt=&header=&cc=&c=95164540&s=qld&snf=rbs&tm=1268274748

Sounds good! The wording makes it sound nice and big. Fingers crossed for you!

D

Work Smart, Not Hard.

Good luck.. I am agreement with other comments here.. If nothing happens soon then change agents and get a fresh approach.. I had a similar problem and found when I visited the unit that it needed a definite spruce plus the site nextdoor had turned into a major development site. Sometimes you have to bite the bullet and drop the rent just to get some income coming in. Have you had a frank discussion with the agent about the state of the unit and the curtains carpet, smells etc. plus ask what is going on in the area/building and has it become undesirable for some reason? (I assume you arent local to inspect it yourself)
  I hope you get a tenant soon. I also tried offering the first week rent free, but in the end someone who applied for the unit upstairs from mine and missed out took mine for $10 a week less than I was asking, but now he's been there 6 months and the development should be finished soon.

Yeah, we are offering the 1st week rent too, and are probably looking at what we can offer the tenant. We had three, rented 2 straight away and the third is just sitting there. One of our problems is that everything else for rent in the area is very old and ours is brand new, so there is a price difference of at least $50. When we first advertised there were other properties nudging the $600 mark (new) and now that they have rented ours is the only one above about $495. Also the quality of tenants we have for the other 2 is very high and for the middle we have had some not very good applications along with people who have dogs, which I personally think it would be lunacy to put a dog in a tiny courtyard. There isn't much you can do after you have exhausted all the steps. Next step I think would be looking at staging it or a drastic drop in the rent by maybe $30-$50 and writing in a 6 mth price revision into the lease.

Good Luck

D

Work Smart, Not Hard.

This is all very simple to me, you have a property valued at $370K (estimated = expected return $37K p.a.-capital growth) and you are concerned about $30pw = $21pw after tax. The property game can sometimes be complicated. In this event it all points to one thing - DROP THE RENT. 

Sorry, I am telling you what others are too soft to say......... AND yes, you may get  $380pw, but really, if I had these skinny margins on an investment, there is no way I would be there in the first place.........

www.birchcorp.com.au