Where's the Doom and Gloom???

[Rob Williams]

My latest IP is nearly complete, so I decided to get it listed prior to completion as I expected to have difficulty finding a suitable tenant.
Mid year is traditionally a slow time for the rental market, in my experience. Also, I thought the FHB boost would take some pressure off the rental market. Also, the D&G in the media regarding rising unemployment etc had me a little concerned.
Imagine my suprise when, within an hour of the property being listed on RE.COM the enquiries started rolling in. That first evening, I showed 4 lots through. Not bad considering the first open was 4 hours after it listed.
Last night I showed 8 couples through and have more scheduled for the weekend.
Some of them are great prospects and are actively competing for the property. One of them even called me after the open to "dob in" some other propsective tenants as smokers. She thought I should know in case I didn't want smokers in the place. Got to admire that bit of creativity.
I'm sharing this only because it shows that the D&G isn't everywhere, if it exists at all. There are still markets within markets and some (maybe many) of them are quite buoyant.

 

[MichaelW]

Well done Rob, and thanks for sharing.

That's a great result and shows that, even in the face of pervasive negativity, the real world goes on and people still need a roof over their head. Residential real estate is not just another nondescript asset category, its a fundamental societal need. That changes its dynamics completely.

Great stuff!

Cheers,
Michael

 

[steveadl]

Can't wait to see the place Rob! Obviously you're reno'ing skills aren't up to my skill level, but I'm sure you gave it your best shot!

I know you're general strategy and you like happy tenants Rob, but do you think perhaps you could have put the place on for an extra $10pw and still had plenty of interest? I know on the other side of Adelaide, rents are increasing nicely, haven't looked at eastern burbs.

 

[Rob Williams]

Can't wait to see the place Rob! Obviously you're reno'ing skills aren't up to my skill level, but I'm sure you gave it your best shot!

I know you're general strategy and you like happy tenants Rob, but do you think perhaps you could have put the place on for an extra $10pw and still had plenty of interest? I know on the other side of Adelaide, rents are increasing nicely, haven't looked at eastern burbs.

You're quite right regarding the rent. However, I priced it based on what else was available in the area. I have noticed that $5 either way can make a big difference to the number of enquiries.
I was going to try for another few bucks pw but didn't want to lose a week if I had to drop it to get more interest.
After reno costs, I'm looking at a yield of around 5%, which I'm quite happy with.

 

[wylie]

We are finding the opposite inner southside Brisbane. Mum has a house for rent which has been empty for two weeks. Nobody at the open house. She will give it to a trusted rental agent to find a tenant and lose a week's rent but at least it will be rented.

I checked last Saturday's paper and this house is similarly priced compared to others in the vicinity, so it is not the pricing. Only three people have been to the opens, one couple who wanted to live there with another two couples (didn't accept them), one lady who had to wait for her lease to be up (still a possibility as time goes on) and another couple who didn't follow up.

This is the first time in quite a few years that either of us has had a house sit empty, so I imagine all those FHB are buying. Mind you, we have never had masses of people apply, mainly because we cannot list our rentals on re.com due to being self-managers.

 

[Pushka]

I know I keep banging on about this, but in other areas there are real doom and gloom issues. And there are lots of things happening that simply are not being released to the public, but which have major impact on public issues. We are just not being told about it yet.

I do agree though that the rental market, in Adelaide anyway, does not appear to be in trouble just yet.

 

[Rob Williams]

Mind you, we have never had masses of people apply, mainly because we cannot list our rentals on re.com due to being self-managers.

I self manage, too. I flick an REA a few bucks (OK, she's a female and maybe I grease the wheels with a bunch of flowers from time to time) to list it on RE.COM for me. They just pass the enquiries onto me and I take them from there.
Job done!

 

[Alex P Keaton]

You're quite right regarding the rent. However, I priced it based on what else was available in the area. I have noticed that $5 either way can make a big difference to the number of enquiries.
I was going to try for another few bucks pw but didn't want to lose a week if I had to drop it to get more interest.
After reno costs, I'm looking at a yield of around 5%, which I'm quite happy with.

A friend over here in perth has had her ip advertised for rent now for I think it must be at least 4 or 5 weeks now for $270. It is a 1 bed in eas.tvi.c park and renovated. I suggested advertising it for $250 and then in 6 months time you could always increase the rent to $270 but she says her repayments are so high she cant afford to.

I think that is a bit silly, would'nt she rather get someone in there and paying the $250 a week and she can just fork out the extra $20 a week, get some secured in there and then increase it in 6 months time. The person wont want the hassle and expense of moving out and will just probably end up paying the extra anyhow.

Hopefully she will change her mind!!

I think the trick is to know what the market rent is like you are aware of and you are able to get it tenanted asap.

 

[weg]

A friend had a very basic and unattractive home for rent recently (priced accordingly) in a nice suburb 5km from the adelaide CBD and had people scrambling for it.

Obviously in this case it was a cheap entry point into the suburb but she actually had offers from people happy to spruce it up at their cost and interest from the type of people not normally interested in such a run down property.

I think a lot will depend on asking rent location and the ability/willingness to pay because the same friend had to drop the price of another property from $650 to $580 just down the road from the other house and then in the end decided to move in herself because of the lack of suitable tenants/interest.

 

[Rob Williams]

Hopefully she will change her mind!!

I think the trick is to know what the market rent is like you are aware of and you are able to get it tenanted asap.

You're quite right. Every week it's vacant at $270 is the equivalent of $5pw on the weekly rent. So, in 5 weeks, she's effectively lost around $25pw.
I would have listened to you about 4-5 weeks ago and listed it at $250, if I were her.
Sounds like she didn't get some risk management in place at the outset, either. No point making a deal based on what you wish the rent would be. I prefer to base my calcs on a worst case scenario. Anything about that is a nice bonus.
She needs to change her mind sooner rather than later. The mightiest ship can be sunk by the smallest leak. Sounds like this is a big leak!

 

[HiEquity]

A friend over here in perth has had her ip advertised for rent now for I think it must be at least 4 or 5 weeks now for $270. It is a 1 bed in eas.tvi.c park and renovated.

WOW! I must be doing something wrong! Here I am renting out a 10yo 4x2+study+DLUG for $370pw just around the corner in Rivervale. Although it is tenanted...

Looks like one of us is wrong on the rental market around here....

Mind you it is still incredibly cheap rent. Up from $230pw in 2002.

I flick an REA a few bucks (OK, she's a female and maybe I grease the wheels with a bunch of flowers from time to time)

Just goes to show that once you make it known you're a single man with a nice herd all sorts of options open up!

 

[Rob Williams]

Just goes to show that once you make it known you're a single man with a nice herd all sorts of options open up!

Still looking for that Big Hat, though.

 

[wylie]

Just remembered another lot who came through an open my Mum had...... young couple and they were picking a few things about the house. Their main objection was that they would have preferred a larger bathroom mirror cabinet .

Mum mumbled something to me about "they're only renting it, not BUYING it".

It seems that with less first home buyers looking for rentals, the prospective tenants are able to pick and chose and be a bit more fussy than, say, eighteen months ago.

Luckily for mum, income is not an issue, so she is "happy" to wait for the right tenant to come along. In years gone by, we sometimes chose the wrong tenant (going against gut instinct) because we needed the cash to start flowing.

 

[Dazz]

I am renting out a 10yo 4x2+study+DLUG for $370pw just around the corner in Rivervale. Mind you it is still incredibly cheap rent. Up from $230pw in 2002.

An increase from $ 8.21 per room per night up to $ 13.21 per room per night over 7 years.


That certainly is cheap accomodation HiEquity.

 

[HiEquity]

An increase from $ 8.21 per room per night up to $ 13.21 per room per night over 7 years.


That certainly is cheap accomodation HiEquity.

Hi Dazz

That it is. It is only now with the recent drop in IRs that I am actually starting to make (a very small amount of) money on this one!

Of course, the CGs have been OK - up from $230k then to $550k now and there was good depreciation in the meantime which helped things along.

But you can't eat CGs if you want to buy, hold and retire!

Need to do better next time...

 

[csc]

if mid priced properties keep falling in CQ and Nth Qld and rents hold up ok I can see some great opportunities coming along before the year is out up this way once the FHB grant is over and done with.............there are some investment properties coming onto the market owned by miners who are screaming to get them off their hands...by xmas they will be on their knees begging.....thats the time to be doing deals up this way...

I also note this week several r/e agents unloading property they own, one in particular has dumped four into the market hoping to cash out....

the fun is just starting up this way.

Postcodes: 4700, 4701, 4703..keep an eye on them......

Opportunities late 09 and into 2010 but not right now except for the odd fire sale.

Cheers

 

[Piston Broke]

None of them can afford to buy a home.

 

[craigb]

Well done Rob, you should tell the people what you did! You bought it for , and now the val is, and what you did to it , ie paint , carpet kitchen etc,
But its funny how we think the worst and the other happens, i hope you get a couple that spend all their money on do dads

 

[Rob Williams]

Well done Rob, you should tell the people what you did! You bought it for , and now the val is, and what you did to it , ie paint , carpet kitchen etc,
But its funny how we think the worst and the other happens, i hope you get a couple that spend all their money on do dads

Yeah, you're right. I had some people around to the project for a drink and show and tell last night. They all loved it. More so when I shared the reno cost.
I'll wait until the final bills come in for the electrical and plumbing, then share it with the class.
I've got people fighting over it as we speak. That's a great position to be in.
Sadly, have to wait abotu 4 months if I want a bank reval to get equity out. In the meantime, I'll settle for an REA estimate as a guide to the return I've got, to date.
Stay tuned for figures and pics in due course ...
Thanks for your advice along the way, too !!

 

[wealth101]

I'm sharing this only because it shows that the D&G isn't everywhere, if it exists at all. There are still markets within markets and some (maybe many) of them are quite buoyant.

Agreed. We attended 2 auctions today, 1 unit was advertised for $360k+ and sold for $445 the other unit was advertised for $350k+ and sold for %502k. We were thinking both would go for low $400k never imagined it went that high. We bought ours 15 months ago running parallel to those for $380k.

We cant see where D&G..