Having difficulty finding tenants for your property?

For many years, Auckland landlords enjoyed having a surplus of suitable renters. Now not so much; properties are sitting longer. Tenants are looking and thinking, "I want a better deal," and landlords are left wondering, "Why can't I find tenants for my property?"

Rental properties, much like all economic elements, are influenced by the market, specifically by "Supply & Demand." When supply exceeds demand, prices decrease; conversely, when supply is low and demand is high, prices increase. This is the nature of investment fluctuations, and your investment property will experience these changes throughout your ownership.

It's important to be prepared to ride the wave through the lows just as much as the highs when choosing to invest in property.

Aucklands Current Rental Market Trends

• Increased vacancy rates

• Higher tenant expectations

• Competitive pricing among properties

New Zealand's current rental market is experiencing several notable trends that are reshaping the landscape for both landlords and tenants. One significant trend is the increased vacancy rates, which indicate a growing number of available rental properties. This shift can be attributed to various factors, including economic fluctuations and changing demographics.

Higher tenant expectations are also influencing the market, as renters now seek more amenities and better living conditions, often demanding modern features and responsive property management.

In response to these evolving needs, property owners are needing to engage in competitive pricing strategies to attract and retain tenants, leading to a dynamic environment where rental prices are closely monitored and adjusted to remain appealing in a saturated market.

Reasons for Longer Vacancy Periods

• Economic changes affecting tenant affordability

• Increased inventory of rental properties

• Shifts in tenant preferences

Longer vacancy periods in rental properties can be attributed to several key factors.

Recent economic changes have impacted tenant affordability, making it more challenging for potential renters to meet rising rental costs among all the other costs that have risen. Tenants are preferring to stay put unless they need to move or unless they find a better deal.

An increased inventory of rental properties has also resulted in heightened competition among landlords, leading to longer times to secure tenants especially for smaller properties like apartments or units.

Shifts in tenant preferences, such as a desire for more amenities or specific locations, have influenced the rental market dynamics, contributing to extended vacancy durations. Tenants are looking at properties, comparing them with others and deciding on the better deal for them, as they are the ones with more to choose from.

Strategies for Landlords

• Adjusting rental prices to be more competitive

• Enhancing property features and amenities

• Strategic marketing efforts to reach potential tenants

• Being responsive to the market and adjusting accordingly

To maximise occupancy rates and ensure tenant satisfaction, landlords can implement several effective strategies.

First, adjusting rental prices to be more competitive within the local market can attract a wider range of potential tenants, especially in fluctuating economic conditions that we are experiencing in Auckland. Before listing, look at similar properties in the area that are for rent, perhaps ones that have an extra bedroom and see the responses they have been receiving at those asking prices and adjust yours accordingly.

Enhancing property features and amenities, like upgrading appliances or improving cosmetic features in the living areas, can significantly increase a property's appeal, making it stand out amongst the rest.

Strategic marketing efforts are just as important. 80% of a tenants 'new house' search is done online, so it's beneficial to spend time presenting your property well for good quality photos. Enhancing the lighting and possibly investing in professional photography are excellent strategies to make your property stand out. Utilising NZ's big listing sites like Trade Me and realestate.co.nz as well as social media, can help landlords reach a broader audience of prospective tenants.

Finally, and most importantly, being responsive to the market once it is advertised!

Avoid being fixated on a price without first considering the costs of obtaining it.

You'll know within a few days of listing if your property is priced correctly based on the number of viewing inquiries. If inquiries are lacking, it's crucial to act swiftly before your listing gets overlooked. Making small but fast adjustments is essential to align with the current market, not where it was three years ago or where you think it "should" be, as unfortunately with all investments, we don't have full control of their worth, the market does.

Remember, each week your property remains vacant, you're not earning income. Lowering the rent by $10 only costs $520 annually, but having your property unoccupied for weeks could result in losing thousands.

Final Take-Home Messages

Be flexible and responsive. Embrace the ups and downs of your investment journey without getting discouraged. It's more important to secure a good tenant who pays less but cares for your property, than to wait for weeks for any tenant who is willing to pay the desired price, if at all finding them.

Contact Kimpton Property Management today if you'd like more advice on finding tenants for your property.