Over the next few weeks we will look at the 14 Fundamentals Of Effective Property Management with Changing Places CEO and Founder, Cameron Fisher.

Last week we looked at second Fundamental Of Effective Property Management – Qualified Staff – sales skills as well as technical skills. Today we discuss Rental Appraisals – a realistic approach.

All landlords want to receive the highest rent possible. At Changing Places we are aware of that and we certainly strive to achieve it. I can give several examples of how an agent should go about achieving that for you. We look into the comparable properties around your property. For example, if you are after $400 per week but other similar properties are offered at $380 per week, it’s not easy to go out and get $400. However, we will try everything we can. We always say to our landlords, open your mouth as wide as you can, within reason, when determining asking rent for your property; however, don’t persist with an unreasonable rental and see your vacancy period drag on and on, costing you money overall. It’s simply not the way to do it.

We do our appraisals, just like you can nowadays. Look on the internet, look at comparable properties and what they are asking (remember the rent some ask for is not always what they get, they may have ended up taking much less in some cases). There are also data providers such as Price Finder and RPData that give estimates. The best way a professional like myself compares properties is through a direct comparison approach: you add the pluses and subtract the minuses to then come up with the rental estimate for your property. It’s important that you stay ahead of where the market is and have a sound knowledge of what’s happening in the market place.

Related Article: One Agent For One Property – providing continuity

Now it’s not always about getting the absolute last dollar. Sometimes, if you have a better and more reliable tenant at $5 less per week, it could save you thousands of dollars over months and years to come if they are a very good tenant. For example, you may achieve $5 a week extra with four student tenants rather, than a professional couple, but the professional couple may end up being the better tenant, as they are likely to stay longer, take better care of the property, be on time with the rent, less likely to skip and able to pay a higher rent at the next review. So don’t necessarily always go for the highest rent. It really is about having the best tenant. Ultimately a better tenant in the long term will mean fewer vacancies which also means less fees, less arrears, less problems with the property in terms of maintenance issues, which is also really important. Don’t be afraid to drop your rent a small amount, say $5 – $10 to find a new tenant. Now, I understand $10 is a lot of money per week over a year, that’s $520 you’ve lost by dropping the rent that far, however if a $500 per week property is vacant for 2, 3 or even 4 weeks longer as a result of not reducing the rent to meet the market, it will cost you $1500 or $2000. Who wants to be losing that sort of money?

It might also be that the time of the year is a bad time to lease your property. Often this is the case with trying to lease a seaside property over winter. A proactive agent will then vary the lease to say 18 months with the new tenant (with a rise in 12 months time if warranted) to make sure the next time the property falls due to rent, it is in the prime leasing time. So again, be open minded, listen to what your agent has to say, look at the reasoning, look at the comparable properties and make the right decision that way.

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