Peak Rental Periods


Most residential investors should know by now that the peak rental periods are January and July each year. This is when most renters are looking for a place, where plenty of ‘house swapping’ is occurring, when demand is at its highest and most importantly for property investors, this is when you can secure higher rents.

Here are some tips for better managing your rental property during these peak periods.

Get your leases aligned

You should try to have your leases always due in January and July, so if this isn’t the case make it the case. Do not continually renew your leases for 6 or 12 months if the property is not falling due during these peak periods, otherwise you will find it hard to ever get into the prime cycle and your rents will be lower than they could be. There is no reason why you can’t offer a 5, 9 or 13 month lease, even if the agent doesn’t tell you this – ask for it!

Price your property fairly

A very amateur mistake is to go for too much rent and have your property vacant for more than 2 weeks, even 1 week in a hot market. Any increase you *may* achieve will be eaten up by your vacancy period. A $10pw over-price on a $300pw property will take 30 weeks to recoup the losses caused by just one week extra of vacancy.

There are exceptions to this rule though. If you are planning on selling, and it is a buy and hold investment property, then you may be better off holding out for a slightly higher rent (this doesn’t work where the buyer is likely to be a renovator or owner occupier). A higher rent may also translate to a higher property valuation, however, this is more common for commercial properties and blocks of units/flats.

Choose your lease length carefully


In a hot market a shorter lease is best (say 6 months). This enables you to reassess and reset your rent as often as you can. That said, it is best if you can keep the same tenant as this will save on vacancy and letting costs. Perhaps an alternative option if legislation allows it is to offer a longer lease with a rental increase clause after a certain period. In a quiet market or with a compromised property (such as a property on a busy road, next door to a pub or near a construction site) you are best looking at a longer lease.

Look carefully at your settlement date

If buying, calculate how much time you need to complete any works prior to advertising the property for rent and aim to settle at a time when the property will become available for rent at peak time. This will obviously be difficult if buying in January, but in a month or two you can aim for a longer settlement so that you can align with the July peak period. If it is not possible to get settlement aligned, then make your first lease a fixed period that will bring you in alignment with January/July.

Don’t fall off the cycle

Over time you will fall off cycle. There will always be at least a few days vacancy when a tenant vacates and sometimes it may take a few weeks to relet, so over time your property will fall off cycle and no longer come available in January/July. Once again, simply adjust the lease period so that it falls due in prime time again.

Always inspect your property

Whenever your property becomes vacant, inspect it. Even though you have a property manager looking after the property, there will be some maintenance items that only you can pick up on, or that require your direct input. By inspecting whenever the property is vacant you can either do the work immediately or plan your next lease around when you would like to complete the works.

Student Accommodation

Some student accommodation can experience very high vacancy periods. Over Christmas most university students break for 3 months or more and this is a period of very low demand, so you need to ensure you lock your tenants in at the start for this quiet period. Offer only 6 or 12 month leases, not 4 or 9 month leases as they will often request.

The above are some tips for improving the management of your investment property.

Investigate Property are buyer’s agents of investment properties and existing and proposed leases are just one area that we look at when assessing a property that is on the market. For more information about Investigate Property click here.

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