How do you handle slower rental growth?
Have you bought an investment property in Melbourne? It’s been an excellent time for it in the last couple of years, as high migration flows and great market conditions have seen values rise at quite a clip. However, it has ended up coming at the expense of rental growth somewhat.
In a January 11 piece from CoreLogic RP Data research analyst Cameron Kusher, noted that “we’ve never seen rental growth as sluggish as it is at the moment”. While Melbourne still had the best rate of growth in the country (2.2 per cent), many people might still be wondering how to make the most of an investment in times like these. So let’s find out!
Pick your spot
According to SQM Research data, Melbourne’s rental vacancy rate went up to 2.8 per cent over December. It means tenants had more choice, and you had to work a bit harder to secure a good rental yield. However, by picking Melbourne’s best suburbs and properties that tenants desire, you can ensure a great purchase.
Many tenants will go the extra mile financially if it means access to the facilities they need.
Places close to public amenities, apartment blocks near tertiary institutions, or family homes in the zones associated with great schools are all major keys to look out for. Many tenants will go the extra mile financially if it means access to the facilities they need.
Make your own additions
Another option is to renovate or add to your property to make it more appealing. This can be especially useful when rents decrease. For example, according to Residex, the median asking rent for property in Essendon went from $550 to $540 per week over 2015.
But adjust your home so it’s got the most appealing factors for tenants, and you might see your station improve. The McCrindle Renter of the Future report listed the following as tenants’ most sought-after lifestyle features in a property:
- Parking spaces
- The ability to have pets
- Strong internet and phone signals
- Multiple power points per room
Some of these are simple to fix, others are more complicated. A car space, for example, might need considerable levels of approval. But think about what you can do to make the most out of your investment!
And as always, make sure to consult with an agent. Here at Nelson Alexander, we’ve got years upon years of experience and knowledge about Melbourne’s best suburbs, where you can find what you need, and how to make the most of it.