Current investor activity in Perth’s residential sector is relatively weak. Despite interest rates being very low and rental yields being around 5 per cent, investors still find the entry costs to Perth property significant.
Particularly against the backdrop of a relaxed vacancy rate and its potential to soften median rents in coming months.
Investor activity in the market is important because around 80 per cent of rental accommodation is provided by the private sector. Governments simply cannot provide rental accommodation for everyone who needs it, so incentives to investors flows through to more choice in accommodation for tenants.
Most investors purchase multi-residential stock such as flats, units, apartments and villas. Partly because these are more affordable than houses but also because, depending on location, they tend to be easier to rent and more sought after by tenants.
Around half of all multi-residential property is owned by investors.Property investors can spend a lot of time researching a suitable purchase but this is only half the skill of successful real estate investment. The other important factor is keeping the property in good condition.Understandably, there is a tendency to minimise ongoing expenditure and to maximize returns, but experienced investors know that spending money to keep a property in good condition results in better performance, including more conscientious tenants, above average rents and fewer vacancies.
Ultimately, a well maintained property is likely to attract a better resale price.Unless you have plenty of spare time and are familiar with the legal processes involved in renting property, it pays to ensure your investment is looked after properly by appointing a licensed property manager. Around 60 per cent of investment properties are professionally managed in WA.Such properties are more likely to require less long term maintenance than those handled privately, simply because property managers conduct regular inspections and advise owners of any upkeep.
A good property manager will also advise owners of any up-coming major work identified during an inspection.Having appointed a property manager you should conduct a thorough inspection of the property to determine any repair work.If a rental property is in top condition when leased, it is much more likely that a tenant will keep it that way. It is important that owners set a high standard for the condition of their property at the start of the lease in order to maintain that standard from the tenants.This is particularly relevant for investors who may have purchased older, possibly run-down properties.
For owners, it pays to spend money on quality locks, security screens, a fresh coat of paint, air-conditioning, floor coverings, window treatments, tap fittings, contemporary tiling and repairs to cupboards.
Better presented properties will attract more appreciative tenants and a better rental return.