What should a property manager and landlord do when a tenant says they want to move out of the property down the track? Here’s how the vacancy period can be minimised.
According to Raine & Horne’s national manager for property management, Maria Milillo, there’s often little value in trying to lock tenants into a lease.
“Perhaps they have ownership plans thanks to the raft of federal government support for first home buyers announced in this month’s budget,” she said.
“Alternatively, a new addition to the family might be on the way, and your tenants want to move closer to mum. Or perhaps they simply need a different property style because they are starting a home business.”
Instead, she advises the following three simple steps to avoid an extended vacancy:
While losing a tenant may seem like an immediate hit to a landlord, Ms Milillo said that a good level of demand within the market often provides a buffer.
“If the tenant relationship has been smooth and your investment property is in a market with plenty of demand, then permitting the tenants to stay as long as they want is usually a sensible course of action,” she advised.
“Market conditions will play a significant part in this determination. In most markets around Australia apart from inner suburbs in some capital cities, rental demand is robust.”
Ms Milillo also urges examining the costs of finding new tenants, including advertising and the production of a new tenancy agreement.
She said: “Whether you pay the costs of finding a new tenant now or closer to the vacate time is moot, especially if the tenant has a current tenancy agreement.
“However, if the tenant is out of contract, a decision to try and lock in the next tenant could depend on whether you have the cash flow to cover the costs of advertising and so on.”
This is where it can be worth landlords speaking with an accountant to determine the next best move.
Consider time on market
Finally, Ms Milillo advises landlords to start advertising three weeks before the tenants do vacate the property to maximise exposure.
“The point is that most tenants seeking new accommodation won’t start looking for their next rental digs until virtually the last minute — so advertising a property’s availability in three months won’t attract many eyeballs,” she said.
Moreover, with an extended time until a property does become available, “the property will drop down the listings on the property portals”, the manager noted.