Do not rush your decision in choosing a tenant, many factors can affect the speed with which your property is let and the type of applicants who are interested. There is no need to accept the first applicant just because you do not want the property left empty (and therefore not earning income for you) or to offer a rental below market rent, in the long run these decisions could cost you money.
Make use of the notice period
In general the tenant will give a 21 day period of notice – use this time to advertise the property to give yourself the best chance to attract and find the best possible new tenant. A savvy landlord will use the feedback from open home viewings to adapt marketing strategies, this feedback may not be what you hoped for but it is a valuable tool.
Not the comments you hoped for? Don’t panic
A common tack for prospective tenants can be that they consider the rental too high in comparison to other properties, that a lot of rentals are available at that time and they are looking at several others.
If you haven’t got a good knowledge of the current market these comments can undermine a landlord’s confidence – if you do not have knowledge of your own you will not know if the comments are valid or not. Negotiate from a position of strength and don’t rush into anything, take the first few days to evaluate the worth of your property.
This is why checking out the market is so important when re-listing your property, this is the first and most important step before the property is advertised. Market trends are changing all the time so the information you had when your current tenants signed up may no longer be relevant. As mentioned above use feedback from open homes to increase your knowledge of market trends.
Concentrate on rentals in your area
All areas have very different qualities combining to set a market rental as do the actual property and amenities – you will need to assess all of these points to find the true market rental value. If prospective tenants query the value you have placed on your property you need to have up to date information to confirm that your price is comparable with other rentals and have details to confirm it. Extraneous factors can also affect feedback and you will need to take these into account and try to minimise them.
One-off and seasonal drawbacks
The weather will always affect open home numbers – who wants to go out when the weather is awful? Do not fall into the trap of accepting a lower rental on these days.
Attendances on open home days may also be adversely affected if there is a national or international event on that day in the vicinity – perhaps the All Blacks playing or the Round the Bays run. Ensure that you know if such an event is happening so you are not disappointed if your open home has a small attendance.
You can’t avoid these drawbacks but by making the most of the three week period of notice you may be able to minimise the impact.
There are always ‘first time’ renters who may not have a very good understanding of current market prices and properties available, this again is where your own knowledge is a plus. If their feedback seems to be uninformed ask how long they have been looking for a property and you can tell from your own facts and figures whether any negative feedback is justified.
Overwhelming interest in your property!
This is every landlord’s dream when many prospective tenants are happy to pay the advertised rental price. However, this may be because you have actually priced the property at less than an achievable rental. Recheck your figures.
Market rent knowledge is power
Know your market, take notice of feedback (factoring in weather and unusual events in the area which may have affected said feedback) and you will have confidence to fix or negotiate the best rental price you can get for your property.
Barry Bridgman has been managing his own investment property portfolio for 25 years. During this time, there has never been any occurrence of rent defaults or property damage and Barry’s goal is to achieve the same for your property. Bridgman Property Management is based in Auckland Central, where Barry has lived for more than 18 years.
