A large number of private landlords in Perth are overpricing their weekly rents when their rental property becomes available for lease according to Stuart Cox, Managing Director of The Peard Real Estate Group.
Mr Cox said that the over pricing of weekly rents was the most common reason why rental properties remained vacant for long periods of time.
"Even if the weekly rent is overpriced by as much as $10.00 in the current market, it may remain vacant for a considerable period of time.
"The latest REIWA figures show that during the December 2009 quarter, the rental vacancy rate in Perth was nearly 5.0% which is a relatively high figure.
"However, a large number of private landlords who leased their properties when the rental vacancy rate was below 2.5% and currently are looking for new tenants, still have mind that they can expect high weekly rents.
"Nearly half of all Perth landlords manage their own property and because they only have to find new tenants every one or two years, they do not understand that market conditions can change considerably over this period of time.
"Over the recent months, The Peard Real Estate Group recorded a surge of private landlords who had decided to use our property management services to find a suitable tenant.
"Reviews of these rental properties has shown that the private landlord has been unable to find a good tenant because the proposed weekly rents were too high. In addition, we also found that the property was poorly marketed to prospective tenants and the landlord was not always available to view the property at times suitable for tenants.
"Another key reason why rental properties may be difficult to rent is that the private landlord has not conducted regular property inspections and as a result the rental property has deteriorated. Poorly presented gardens, dirty carpet and walls as well as broken electrical and plumbing fittings can deter good tenants from leasing a property.
"When there is a large number of properties available for rent, prospective tenants will be highly selective and as a result poorly presented properties will remain vacant for long periods of time.
"One of the major benefits of using a property management company is that they undertake regular property inspections of the rental property to ensure that it is maintained to a high level.
"When the property becomes vacant, they are also able to set the correct market rent for the property as they manage lots of rental properties and therefore have a good understanding of changing patterns in weekly rents.
"The services of a property management company are also tax deductible for landlords who pay income tax," he said.
Source: RealEstateWA, Friday March 12, 2010