Why can’t I find a tenant for my investment property?
For over 20 years, we have been working with a strict selection criteria. Once you see and understand the selection criteria, you will also understand why the type of investment property we recommend is seldom empty for any more than a few days between tenants. In our modern Australia where there is still, in most capital cities, a deficiency of housing stock, there must be something far wrong if you can’t find a tenant for your quality property investment.
Many excellent areas of our major cities may, at times, have a slight over-supply of rental stock. Keeping your property rented is a high priority and you may even have to lower your weekly rental to secure a tenant in the worst of times. This is not the end of the world and there are two major points that must be understood;
- A lower rental means an increase in over-all loss. In most cases where your property is negatively geared, between the slight lowering of the management fee because of the lower income and the ATO increased rebate, you are likely to be paying less than half of the decrease in the weekly rent, particularly if you are on a high marginal tax rate.
- Correct financial structuring at the time of purchase will ensure that funds are available for any eventualities. It would be a very poor property investment that was lying empty for 6 months but even so at say $400 per week, this would be a gross loss of around $10,400 but probably net of around $6000. On a reasonably located property (which would not be empty for 6 months anyway!), $6000 is equivalent to a 1.5% annual growth. In a market like Sydney which has seen double digit growth for the last few years, it’s still ‘money in the bank’.
