Minimise vacancies with 13-month leases: PMs

Minimise vacancies with 13-month leases: PMs

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With the end of the year typically marked by a rise in vacancies, property managers can minimise this risk by ensuring leases do not end during this period.

Director of Property Management HQ Kelley Seaton started enforcing 13-month leases in June after seeing a number of her tenancies ending during December.

Since using this new 13-month leasing system Ms Seaton told Residential Property Manager she has not experienced the end of year leading rush. 

“We’re now not having any leases, wherever possible, end late November through to December so that might mean we’re not taking any lease that ends in that period,” she said.

“It’s either taking a 13-month lease if we can but if we think the rental yield is going to go up a lot earlier than the 13-month then we will sign them up for a nine-month or a 10-month but not a 12 because we don’t want them sitting on the same date next year.

“We should have implemented it 12 months ago with our last year’s leases because there were people moving out and they had 12 months leases from last December.”

Ms Seaton said longer leases protected their landlords from tenants who wanted to break their lease earlier.

Director of property management at Harcourts Hills Living Kate Towerton said her office had a similar strategy of having 11-month or 13-month leases to prevent properties from becoming vacant after 12 months.

“I would encourage any property manager to be aware of when they’re doing lease renewals or new leases of a date that would allow a tenant to give 14 or 30 days notice approaching the Christmas period.”

“It’s something that we’ve had a big focus on over the last 12 months particularly with management takeovers, which is something we started suggesting to our new landlords who had been renting through other agencies and had had the same issue come up several Christmases in a row and it’s a really simple concept but makes a huge amount of sense to do it that way.”

Ms Towerton said the concept of having tenancies end prior to mid-November or after the Christmas break appealed to tenants and landlords.

“I think it’s also important to be aware of what drives your area and its rental market and a lot of our area is a lot about school seasons and school catchment areas.

“On the other side of the fence, people do prefer to move in the school holidays when they have to take leave anyway and they’ve got time off so we always encourage landlords not to be alarmed.”

She added that property managers needed to ensure their rental properties were competitively priced on the market.

“You need to be aware of the timing at this time of the year and make sure you’re not getting a price that’s far too high and it’s going to mean that something is going to carry on and doesn’t lease until January and the landlord misses out on one to two weeks’ rent.”

 

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