Forums / Property Investing / General Property / Question on vacancy rates

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  • Profile photo of MattMatt
    Participant
    @daf101
    Join Date: 2015
    Post Count: 6

    Hi All,

    Probably a very basic question, however I’ve struggled to find a definitive answer on the internet that I’m comfortable with. I understand that vacancy rates are the measurement of time where a rental is vacant, however, I’ve noticed its measured in a percentage. In my first example, I’m using Glendalough, Western Australia 6016 on the following website:

    http://www.sqmresearch.com.au/vacancy.php?t=1

    And have noticed for this month it has a vacancy rate of 1.9%. I’m wondering, is that measurement based on a year or month? (So that would work out to be 6.9 days for a year or a month being around half a day, I may have my working out way of because I’ve just used a percentage calculator)

    Any response is appreciated! Thank you!
    Matt.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,325

    Hi Matt,

    I understand that vacancy rates are the measurement of time where a rental is vacant, however, I’ve noticed its measured in a percentage.

    It is measured in a percentage primarily because it involves numbers only, not time. Vacancy Rate is worked out like this :-

    Number of properties available for rent in a suburb / Total number of rental properties in suburb * 100 (to get a %age)

    Here’s an example :-
    A suburb has 400 houses being rented and only 4 available to be rented. So Vacancy rate is 4 / 400 = 0.01 * 100 = 1.0%

    1% is deemed to be a landlord’s delight, with 3% being the accepted “normal market” (from what I have read). At 1%, renters could well be queuing up, and even bidding up the rent, to get a place to stay.

    Benny

    Profile photo of MattMatt
    Participant
    @daf101
    Join Date: 2015
    Post Count: 6

    Hi Benny,

    Thank you, that makes much more sense.

    Cheers,
    Matt

    Profile photo of Howard MoralesHoward Morales
    Participant
    @howardm673
    Join Date: 2015
    Post Count: 16

    Good advice!

    Howard Morales | Selling investment property in brisbane
    http://www.mcbeathrealestate.com.au/

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 313

    great post by benny it is percentage of homes available to rent nothing to do with time. Try to stick to areas with a 2% max vacancy rate and you should be able to rent places fairly quickly.

    If you want up to date vacancy rate searching by postcode go to SQM research website and choose free property data.
    http://www.sqmresearch.com.au/terms_vacancy.php

    BuyersAgent | Precium
    http://www.precium.com.au
    Email Me | Phone Me

    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW

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