How to rent new development units

If you’ve just finished your property development, depending on your investment strategy you may be in a position to hold all or some of your new units as investment properties.

So when the hard work has paid off and the final product is ready for professional photography and the rental market, whatever you do don’t blow it.

In the past two months, I have helped two separate property developers to rent out some of their stock.

Both had built blocks of nine units, with comparable layouts and within markets that were competing with many other new units in the immediate and surrounding suburbs.

We achieved a great result for Developer 1, who had all nine units rented within four weeks of completion.

Unfortunately for Developer 2, that complex sat vacant for more than five weeks before securing the first tenant – so what was the difference?

Firstly, let’s touch on strategic letting because with any Metropole letting campaign it is important that you have a known and proven strategy to help you to secure quality tenants in a timely manner.

Some key factors you should consider include:

1. Promotion

Ensuring you have a prominent position on the main property domains/platforms. 

We highly recommend realestate.com.au’s Premiere Listing feature which secures a prominentposition for 30 days. 

Use professional photography to highlight and show off your property and attract tenants to the viewings.

Finally, ensure you have pre-set inspection times listed at tenant-friendly times (Tuesday and Thursday evenings after 5:00pm and Saturday mornings).

This is because we are now living in an age of convenience, so it makes it easy for your tenants to book, register and/or enquire.

2. Presentation

With a new build (just as for established property) ensure that all maintenance is complete. 

First impressions count and you don’t want a prospective tenant walking into a property that is yet to be complete, or has outstandingmaintenanceissues, because this sets the wrong tone.

3. Plan of Action

It is important to tailor each letting campaign to include such factors as property type, demand, suburb demographics and the current market. 

From there, you need to decide on an initial letting price that is ambitious yet achievable.

If there are multiple properties in the same building or complex you should also consider setting your price at 95 per cent of what you would like to achieve.

This strategy creates more tenant enquiry and interest, more attendees at your inspections, which can lead to multiple applications.

So, what led Developer 1 to a successful outcome long before Developer 2?

Here are a few specifics points to consider when renting multiple properties within the same complex:

Multiple agents

Although it may seem like the best idea at the time, like with a property for sale, listing with multiple agents causes confusion, lack of accountability and lack of motivation among the agents themselves.

You really do need one team to drive the letting campaign and provide feedback and guidance.

Market saturation 

With multiple agents it generally leads to multiple listings online and the last thing you want prospective tenants to know is that there are multiple units available in the one development.

Not only does this put control into the tenants’ hands (as they can view and apply in their own time) it also ruins any chance of creating a sense of urgency/competition among tenants, particularly at a viewing.

We recommend selecting no more than two units to advertise at any one time.

This allows you control the enquiry and direct it to the units you require to be tenanted first.

Proactive lease structuring

If you have multiple units/properties, it is not in your best interest to have all leases expiring at the same time.

With this in mind, it is in preferable to align the properties within “peak letting periods”.

For Brisbane, this is January and February and again we see this peak in June and July.

We recommend staggering your lease expiries throughout the peak letting periods to ensure that you do not have multiple vacancies at any one time.

One final word, if you are in a market that is experiencing high stock levels of comparable properties, it is important to understand correct pricing to ensure your property stands out on the market and we achieve your desired result without extended vacancy.