Are you worried your property is under-rented? Your instincts could be right. Despite the hectic summer market each year, approximately 50% of residential rental properties are under-rented.
Why are so Many Under-Rented?
Rents Not Adjusted at Renewals
One reason is the number of private landlords who don’t adjust rent at each renewal or new tenancy, either because they don’t like confrontation, or because they don’t have the time to figure out what the new rent should be set to, so they leave the rent as is, missing out on more cash-flow.
Rents Not Moving with the Market
Even when landlords do rent their property at market rent when re-tenanting the property, soon this property naturally goes below market rent as the market and rent continues to grow in reaction to population growth and increasing tenant demand. The Residential Tenancy Act allows landlords to adjust rent twice a year (ie, 180 days after last increase), which can prevent owners from adjusting rent when moment the market rises.
This case is most often seen in winter, when landlords rent their properties below level set in the summer to attract tenants when demand is low, and don’t re-adjust it later during the summer months when demand is at its highest.
Rent Not Being Adjusted Properly
The shortage in supply compared with demand has been occurring in Wellington for a long time. Since 2009, mean rent in Wellington has increased by 43% (from $351 to $502), largely driven by population growth. In Wellington alone, the population is estimated to increase by 4,083 in 2019-2020 according to the City Council. Its unlikely enough developments will be built in time to accommodate this growth.
How to Check If Your Property is Under-Rented
Best thing to do is check comparable market rents (or contact us) to make sure you’re not above or below the market.
You want to get the rent right from the get-go, especially when advertising. When it’s too high, you risk long advertising periods. If it’s been up for some time, then likely people think the rent’s too high for that type of property. As time goes on, your listing gets pushed lower, receiving less attention. When you rent too low, you miss out on rent your property is worth.
The easiest way to make sure your property is receiving the best rent achievable in the current market is by contacting a professional for a rental appraisal. As residential rental property experts, our team is always up-to-date with the market, and any changes and trends that are occurring. While conducting rental appraisals we can also provide recommendations on cosmetic improvements that could help increase rent and demand.
Click here to arrange a rental appraisal with one of our experts.
If you're considering Property Management get in touch with us today. Locally owned and managed, we offer residential property management services across the entire Wellington & Hutt Valley region.
We take care of investments, offering peace of mind and a personal service to investors and tenants alike. Our solutions are backed by industry-leading technology and proven systems that promote both excellent property care and strong investment returns. Taking on all aspects of the landlord’s role, we guide our clients with professional, tailored advice using our extensive experience and insight in the rental market that can only be built over time.
If you would like to chat about the possibility of working together, or to receive a no-obligation, FREE Rental Appraisal get in touch with our team today.
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Call Jordan Atkinson - 027 297 0873
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