23 April 2018
In Australia’s perpetually crowded rental market, the odds of securing any sort of home – let alone one that ticks all your boxes – can seem daunting.
Fast-increasing prices and the advent of so-called “rental bidding” further complicate the picture. And during the summer months, fluctuations in stock can create wildly variable conditions from week to week.
But there is reason to be optimistic. Despite perceptions that the rental market is somehow rigged – particularly in large cities such as Sydney and Melbourne – agents and advocates say that ordinary Aussies stand a good chance of renting in 2018.
Consider house-hunting in early January when there is less competition. Photo: Edwina Pickles
If you understand what landlords are looking for, are willing to take care during the application process and choose the most appropriate month to search, you might be surprised by what you can secure.
1. Always write a cover letter
Few agents ask for one, but including a cover letter with your application can dramatically improve your chances of securing a rental.
Crucially, a one-page cover letter can find its way to the landlord, who is almost never present at inspections but has final say over who is granted the lease.Making a personal connection with the landlord through a cover letter can be very valuable.
Make sure you have all your documentation ready before the inspection. Photo: Pat Scala
“Make it a good story,” says Eileen Carroll, sales director of Ray White Glebe. “Tell us why you’re the best person for the property. A little story about yourself will help your cause.”
2. Gather everything you’ll need – and then some
While some agents do not require additional documentation such as proof of ID and written references to be supplied at the time of application, Carroll says prospective tenants should submit these documents anyway.
“Have it all ready, so if you are accepted, you can actually secure the property,” she says. “If I’m chasing people for these documents before they’ve even signed the tenancy, alarm bells start to ring.”
Agents may move on to the next applicant if you don’t have your deposit ready. Photo: Dan Soderstrom
Providing ample references and other documents from the outset can also give you an advantage over less organised applicants.
“If someone submits an application with just a payslip from a month ago and a passport, it’s not really that interesting to me,” Carroll says. “But if the application has a covering letter, two current payslips, a personal or work reference and they’ve completed their 100 points of ID, I’m impressed.”
3. Apply online if you can
Scanning your hard-copy documents and completing an online application form may be irksome and time-consuming, but for agents it’s a godsend.
Even if a property is popular, don’t be tempted to pay more than the advertised price. Photo: Eddie Jim
“I had eight properties open two weeks ago and I leased all of them,” explains Carroll, “so the paperwork was miles long. Online applications make my life easier.”
Most online application forms also include a section for additional comments, so make sure you use it. “The standard form we use actually asks applicants to explain why they like the property in question, and I find that really helpful,” Carroll says. “It’s the first thing I go to now in the application because it gives me a better indication of who we’re dealing with.”
4. Think carefully before offering more than the listed price
Australia’s chronic shortage of inner-city housing has led to an increase in so-called “rental bidding”: offering more than the asking price in order to beat out the competition.
Leo Patterson Ross, advocacy and research officer at the Tenants Union of New South Wales, concedes that this strategy can be effective for those who can afford it. But he cautions that rental bidding can set a dangerous precedent.
“It’s pushing up prices not only for others but for yourself,” he says. By indicating a willingness to pay more than advertised, tenants may increase the likelihood of further rent rises in future, which could ultimately make the property unaffordable.
5. Be ready to pay your deposit
Having your application approved does not guarantee that the agent will hold the property for you. “If I call someone in the morning, tell them their application has been approved and ask for their deposit, and they say, ‘Oh, I’ll pay it later this afternoon’, I automatically go to the next application,” says Carroll.
“If they’re going to pay it later that afternoon, that tells me they’re waiting on the outcome of another application or they can’t afford my property.”
Carroll says delaying payment of your deposit by even a few hours can be risky. “I don’t want to lose my other applicants waiting for a deposit to be paid. Waiting a day for the deposit could mean my other applicants have moved on to other properties.”
6. Choose the most suitable month to apply
Unlike most of the year, when the number of properties on the Australian rental market is relatively stable, the months of January, February and March vary wildly in terms of volume.
According to Domain data, rental listings are at their lowest levels between late December and late January, when much of the country is on holiday. But some rental properties are open for inspection during this time.
Carroll says house-hunting in quiet early January can mean less competition and a better chance of striking up a relationship with a rental agent.
If you’d like to maximise your options, wait until late January or early February, when many landlords return from holidays. But remember that university students house-hunt during this time, increasing competition in less expensive suburbs.
If you can afford to wait until March, you’ll find the market returning to normal levels – and there may be an opportunity to pick up a bargain rental that didn’t lease during the February rush.
7. Don’t despair if you are young or haven’t rented before
Many prospective tenants assume that age and wealth trump all other considerations in the eyes of agents and landlords. But the truth is more nuanced.
“Real estate agents and landlords are ultimately trying to assess risk when choosing applicants,” says Patterson Ross. “The factors they are mainly considering are the ability to pay the rent, and the likelihood of damage occurring to the property.”
“A previous rental history is part of demonstrating that you represent a lower risk, but you can do this in other ways as well – most likely character references from employers or other people who can talk about things like your responsibility, cleanliness and so on.”
Carroll says she has rented properties to people without employment who could demonstrate significant savings, and to others who had less money than their competition. “For me, it’s ultimately about whether the application stands out or not,” she says.
09 April 2018
Author: REIWA President Hayden Groves via reiwa.com.au
Although rent prices across the state have been on a downward trajectory for the last couple of years, the rate of decline has slowed with the median rent price holding steady at $350 per week since April last year.
The number of rental properties on the market has also improved, declining to approximately 8,500 listings metro wide, well down from the peak of 11,300 in 2016.
While Perth landlords don’t enjoy the dominance they experienced a few years ago, property investment is still a smart decision. And thankfully, interest rates on borrowings continue to sit at historically low levels, mitigating some of the short term financial discomfort resulting from lower rent prices.
Get your asking price right from the start
When pricing your property and preparing it for lease, it’s crucial you heed the advice of your REIWA property manager. Tenants are out there in good numbers, in fact, leasing activity reached an all-time high last year and remains at above-average levels in 2018.
Provided your rental property is marketed competitively, you have a very good chance of securing a tenant. However, if you choose to price your property higher than your agent’s recommendations, tenants are very likely to bypass your listing.
The first two weeks of listing your property for rent are the most crucial. Get your initial asking price wrong and you can end up chasing down the market, destined to end up with a weekly rent price below market value, plus you’ll bear the rent cost you missed out on when your property was vacant.
Forecast looks positive for landlords
Pleasingly for landlords, the Perth rental market has improved over the last six months and we are slowly seeing it transition into a more balanced market.
The Perth vacancy rate declined to 5.3 per cent in January – the lowest level since July 2015 and down from a peak of 7.2 per cent in June 2017. This sharp decline indicates that normalcy is returning and market parity, in terms of supply and demand, is not far away.
Despite these obvious improvements, REIWA’s forecast for 2018 cautions against expectations of rapid growth in rent prices over the coming year. Property owners are still advised to meet the market – you are better off with less rent per week than having a long vacancy period with no rental income at all.
It is also advisable to be flexible with the conditions you put on your rental. For example, not allowing tenants who own a pet to rent your property can deter people who would otherwise be interested. It’s in your best interest to consider tenants with pets on a case-by-case basis, secure in the knowledge the bond, pet bond and landlord insurance will be there to cover any pet-related damage.
For obligation free landlord assistance Sarah Morgan 9475 9622
27 November 2017
NICOLA MCDOUGALL via domain.com.au
During property transactions, sometimes the seller hasn’t found anywhere else to live by the time they sign on the dotted line.
One of the most common solutions to this situation is renting back the property to them for a period of time, but is it a good idea?
Property Pursuit director and buyers’ agent Meighan Hetherington said the “rent-back” option was more likely in an off-market sale that happened sooner than the seller had anticipated.
Deciding whether to offer a long settlement or a rent-back depends on each party’s circumstances. Photo: Gabriele Charotte
Renting back the property to the seller also gave the buyer a stronger negotiating position, she said.
“That’s a really strong position to be in from a negotiation point of view because we can meet the seller’s needs without offering more money,” she said.
“The seller can either have a long settlement with the comfort that they have got the sale or they can have a normal 30-day settlement and they can be cash buyer to jump on any opportunity if something comes up but not have to move before they’re ready.”
It’s important for the tenancy agreement to be explained in detail to the seller to prevent any potential issues. Photo: Lisa Maree Williams
Deciding whether to offer a long settlement or a rent-back depended on each party’s circumstances, but one usually put the buyer in a stronger position than the other, she said.
“You can often negotiate a better price by offering a normal settlement with a rent-back than you can in offering a long settlement,” Ms Hetherington said.
Long-standing Toowong sales agent and principal Doug Disher said rent backs were often mutually beneficial to both the seller and the buyer, such as when the property had been bought for future re-development purposes but the original owner had not found a replacement home.
But he said it was imperative that a formal lease was drawn up if renting back the property to the seller, to ensure the terms and conditions were clear.
“The most important thing in any arrangement is to ensure the terms are legal, clear and precise,” he said.
“It’s essential that both parties understand their obligations under any such arrangement. It is always best to get legal advice before entering into any agreement involving rent-back situations.”
Ms Hetherington said one of the risks with renting back a property was that many sellers had not rented for a long time and often misunderstand their rights and responsibilities as well as those of the landlord and property manager.
It was important for the tenancy agreement to be explained in detail to the seller to prevent any potential issues during the tenancy, she said. Likewise, an entry condition report was imperative.
“The entry condition report is the only piece of evidence that the new owner has to say what state that property should be left in by the tenant when they vacate,” she said.