Heroly Chour reveals why he had to change property managers and what he learned from the experience.
“I purchased a two-bedroom townhouse in Logan Central [south of Brisbane] in March this year. It wasn't my first purchase in Logan and, based on previous experiences, I thought it would all go fairly smoothly.
The property was vacant upon possession, but I thought finding a tenant would be a breeze and it would be cash-flow positive from the get-go. After all, I didn’t need to do any work to the place. It was ready to be leased as soon as it came into my hands.
Soon after settlement in April (which all went through without a hitch), it became clear that the process of finding a tenant would be much harder than I had anticipated.
Four weeks went by and I had to drop the rent. Another week went by and I dropped the rent again. My property manager just wasn’t having any luck finding a tenant.
I suspect a big part of the problem was down to the large release of housing rentals back onto the market by one company, which resulted in an absolute mass of rental properties becoming available at the same time.
Frustrated by the lack of interest being fielded by my property manager, I decided to enlist a second agency to advertise the property. In hindsight, that was the best decision I made.
The new property manager found a tenant within two weeks and signed them up at the initial rate I asked for. I think a lot of the time, in smaller cities like Logan, your success depends on who your agent knows. In this case, my new agent already had contacts lined up for my property.
Since finding a tenant, I’ve had no issues with the property. Those seven vacant weeks have, however, meant the difference between the property being positively and negatively geared for this financial year. Not having a tenant for such a long period of time massively threw my calculations off.
But that’s how property investment goes. You have ups and downs, and the trick is to minimise your losses and move on. As I tell everyone in my investment circles, don’t let one bad experience ruin your property investment journey.
The bad experience hasn’t put me off Logan either. In fact, I’m in the process of finalising another purchase there.
The local council seems to be quite progressive in its development approach, even making it easier to create dual income opportunities such as building a granny flat, which I plan to do with this next purchase.
Logan is also benefiting from the tightening yields and increased prices up north, with values starting to increase and signs of gentrification slowly emerging. I’m struggling to convince vendors to sell for a price lower than $300,000.
These are positive signs surrounding the future value and yields of my Logan properties, making me certain this rental experience was just a small blip on the radar.