Beware of rising vacancy rates

Why is it that I’m having trouble finding a tenant if property is booming?

Now that’s a question I’m hearing a lot from investors lately.

I guess they’re thinking, “Shouldn’t it be that when the property market is booming that rents should be rising?”

However in a rising market we often see tenants bring forward their buying decisions and this means that capital growth and rents don’t move in the same cycles.

Fact is: in today’s low cost of money environment in many cases it’s not much more expensive to buy than it is to rent.

buy rent

Some things to watch out for:

At Metropole we’re seeing lots of tenancies broken with the reason of having purchased their first home.

Something to watch out for!

Also, currently there are also some pockets of oversupply, especially in our capital city CBD’s, and these will provide plenty of options for potential tenants.

Of course at a time when properties experience strong capital growth, but rentals aren’t rising rentals yields fall.

That’s just how the numbers work, but it’s not a reason not to invest in real estate.

Then as the cycle moves on (and it always does) capital growth will slow, oversupply will be taken up, and rents will rise.

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So if you have vacancy issues currently these are my tips:

  • Price – Be realistic with the rents you ask for  – in a competitive market the best thing you can do is drop the rent and meet the market.Don’t think of this as going backwards, instead think of it as improving your rent because last week your rent was zero.
  • Presentation – if you are getting lots of enquiries about your vacant property yet no tenancy applications maybe your property is looking tired and could use a refresh.Potential tenants have lots of options and are likely to go for a better presented property.
  • Promotion – make sure your online presence stands.Pay your property manger for professional photos and feature listings to get near the top of the popular property portals.

Want more of this type of information?

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Shannon is director of Metropole Properties Brisbane and as a successful property investor and licensed estate agent, his years of industry experience helps his clients maximize the performance of their investment properties. Visit

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