Investor Information
Property Investors Corner
Firstly, you can be assured that my team and I are very conscious
that we represent the interests of our property owners and that we
are specifically charged with the duty of ensuring your property is
occupied by a reputable, reliable tenant who pays on time.
As Manager of this division I constantly get my team to think vacancy
rates because this is an extremely important factor in maximising
the return our clients get from their property investments.
But, the marketplace is always the judge and there are a number of
factors which do impact on vacancy rates, most notably:
The
Rent Is Too High
Whilst the owner can set the rental rate, the market and the tenants
determine it. If the rent is too high it will remain vacant. Put another
way, high rents can lead to long term vacancies and/ or high tenancy
turnovers which ultimately affects your income.
Given that we manage around 500 properties, I can assure you that
we are attuned to the rental rates the current marketplace is prepared
to pay and we are constantly seeking to maximise your property returns
through rental adjustments without sacrificing these returns because
of unnecessary vacancies. But, vacancies do occur in this industry
as tenants make decisions to move on. Thankfully, in today’s
market this has not been much of a problem because we do have a bank
of interested tenants.
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Market Conditions
The rental marketplace is subject to the laws of supply and demand
just the same as any other marketplace. Thankfully, it has been some
time since the God Coast experienced a flat marketplace, but is has
happened in the past and doubtless it will in the future. When it
does occur, tenants have more choices and are in a stronger position
to negotiate on rents. Presently we do not see any issue in this regard
and we will keep you informed on a regular basis as to the stability
of the marketplace.
Poor Presentation
It is critical that your property presents well in order to attract
a quality tenant who is prepared to pay the current market rental
rate. Remember, tenants usually have a choice of at least two or three
properties when deciding. At Robina Realty, we really do make a big
effort to ensure the properties can present as well as possible because
we want to maximise your return. In this regard we do thank the very
great majority of our clients for assisting us here by agreeing to
undertake necessary repairs and maintenance so as to aid the presentation
process.
Accessibility To Transport & Facilities
It’s an undeniable fact that properties which are close to amenities
command better rents and have fewer vacancies. A related article in
this newsletter will explain more here.
In closing and on behalf of the rental division, I’d like to
wish our property owners the very best for the festive season and
please be assured that our brief at all times is to represent your
best interests and I am always open to suggestions on how you believe
we can improve things for you. Call me on 1300 ROBINA (local call
rates apply Australia wide).
Finally, if you believe we are deserving, I’d really appreciate
it if you’d put in a favourable word about our services with
your property investor friends and associates. Presently we have the
capacity and the systems to handle many more properties and what we’ve
noticed, the bigger we become so to too does the bank of tenants interested
in renting…now that’s a WIN-WIN!
The Devil – And The Direction Of The Property Market
– Will Be Found In The Detail
It's often said in jest, that if you ask seven economists to give
an opinion, you'll get eight or more different answers and sometime
down the track, all seven economists will claim that they accurately
forecast what would happen.
This scenario is also true of property forecasters and it can be very
confusing when you constantly read seemingly diametrically opposed
views of the same issue.
However, astute property investors know that property is like any
other product and it is very dependent upon the laws of supply and
demand. That said, let's revisit the basics and we do so by sharing
information as gleaned from one of the leading demographic reviews
of the property market -- the Matusik Snapshot. By the way, all serious
property investors should use this as a reference tool.
The Baby Boomers Who Are Driving The Investment Boom Pick
Qld As Hot Spot Because…
Significantly, the South East Queensland area which presently contributes
11% of Australia's gross domestic product (GDP) is expected to have
a population base within the next 50 years of over 5 million people
- that's more than double the present population and all wedged in
the triangle between Noosa, Toowoomba and Tweed Heads.
Plus, the finance franchise group Mortgage Choice uncovered some interesting
information in their recent survey of the baby boomers -- that segment
of our population which is now “asset rich” and is driving
the investment boom of the country. Specifically, they found that
Queensland was the preferred investment state with 34% of the 650
nationwide respondents who were planning to buy an investment property
in the next 12 months.
Maybe the Mortgage Choice survey respondents have tapped into what
is actually happening in the Queensland rental market. Let's examine
that now:
...Demand Is Increasing As Are Rents
For starters, rents are on the rise because of tight supply. Private
weekly rents rose by about 10% across Australia during 2005/06. Tuned-in
demographers and researchers such as Matusik are anticipating rental
increases of between 10% and 15% in this current financial year; no
doubt spurred on by the two interest rises and the tight vacancy rates.
Looked at from another perspective, it's quite simple. The last property
boom pushed prices beyond the affordability level of many people.
Not only that, the interest rate rises and the petrol price increases
have made it more difficult to meet monthly repayments and still find
a decent lifestyle.
However, More Tenants Will Be Forced To Share
However, it is important to drill down on the likely composition of
the rental market in the immediate future. With rents likely to increase,
the affordability factor for those who rent must be examined. For
starters, over half of those who rent are aged under 34 years and
the higher rental amounts are likely to see a steady increase in shared
or group households as opposed to lone person renters. The significance
of this meaning that when buying an investment property it is important
to consider whether it can be rented out in a share situation. That
is, a two-bedroom/ two bathroom apartment has a much better “rental
appeal” than a two-bedroom/one bathroom configuration.
But, Property Investors Must Keep Focus On The Total Investment
Return
As any canny property investor will tell you, focus must be on the
total investment return of a property which is a combination of both
the capital gain and the net rental return.
Both capital gain and the net rental return are significantly influenced
by the law of supply and demand. All the evidence points towards huge
demand for Queensland and the Gold Coast in particular. True, we are
extremely biased in recommending the central region of Gold Coast,
but we do so with confidence knowing the demographic statistics support
our contention.
Robina & Varsity Lakes…Just Keep On Rollin’
It’s impossible to miss the building activity in Robina and
Varsity Lakes at the moment and just as quickly as buildings are completed,
they are sold. As proof, be aware that the six story office complex
– HQ@Robina – has sold out, so too has the Easy T Medical
Centre, and stage two of the East T Shopping Centre has commenced.
Plus, work has well and truly commenced on the new Gold Coast stadium
site. Truly, a drive though the area will confirm that this really
is a thriving, growing, active part of the most vibrant part of Australia.
Yep, everyone wants to live on the Gold Coast and naturally, they
need housing and infrastructure. |
