How well do you understand your tenants? have you ever thought about their habits when they look for a suitable property? This article is designed to shed some light on these mysterious people who occupy an investor’s biggest asset, and quietly and patiently help you pay the mortgage week in, week out!
today, I thought it’d be useful to share some interesting stats on tenants and tenant behaviour. It may be useful for anyone self managing and for the typical conversations landlords may have with their property manager when faced with a vacancy.
So here a list of 9 Interesting Facts/Stats relating to the people that are helping you with your mortgage payments.. They are listed in no particular order, and a lot of these stats have come courtesy of the REA group (thank you REA)!…
1. December is the worst time of the year to rent a property, January the best. If you don’t believe me, have a look at the adjacent image which depicts the traffic for one of our REA rental Ad campaign of a Sydney property. The Campaign started in mid December and this graph was taken in mid January. Almost like magic, traffic shot to the sky on the first week of the New Year! Yes tenants are back in January, and they are indeed looking to settle in before they go back to work or their kids start school. If there is one month in a year to be aggressive with your rent, January is that month!
2. the ONLY 2 channels tenants look for a rental are realestate and domain. Domain is part of the Domain group which has 3-4 other sites (ie allhomes). Realestate is owned by News Corp and the domain group by Fairfax. There are 2 or 3 other entrants like rent.com.au but the aforementioned own 100% of the agent’s market. In other words, no real estate agent would even dare not advertise on one of the main platforms. It should be stated that in some places realestate is more popular, whilst domain is in others. Allhomes for example is the dominant player in Canberra whereas Realestate is the dominant player in Sydney and Adelaide. Overall realestate is the more popular platform in Australia, and to my knowledge, every property managers will advertise with realestate but not always domain and not the other way around.
3. Tenants have now well and truly stopped looking at newspaper ads and print publications for a rental property. The only exception to this, may be some local non-English newspapers which some migrant groups (ie Chinese and Vietnamese) anecdotally still use. Personally, I tried a couple of times to advertised on 2 of these popular publication but never heard back! Needless to say, I will waste my clients money on those again!
4. “For Lease” Rental Signs – in my experience – serve no purpose. The chance that the ideal tenant happens to walk down the street and randomly stumbles onto a “For Lease” and calls through for more information, is slim to none. So why so many signs I hear you ask? because a. property managers want anxious Landlords to feel better and b. because it is great advertising for the agency (not necessarily the property)!
5. According to REA 77% of tenants, search for a property on their mobile device. That’s right… tenants are really sophisticated these days and research the market inside out. If your property is incorrectly priced, it has no hope of getting rented. If there is a better property nearby, your property needs to wait for that property to be rented first! Tenants will search from everywhere and anywhere. They will save properties and inspections and then they will monitor them and get notifications for any changes property managers make as days go by. Do not underestimate the intelligence of the average prospective tenant. They probably know the local market market, a lot better than the average property manager who is trying to lease out 5 to 10 vacant properties at any given week, and is most likely running off their feet.
6. Tenants will do most of their searching for a rental property between 4 and 8pm at night according to REA. In my experience, whilst they will also peruse listings throughout the week and zero in on a couple, it is most likely that it is Friday when they decide which properties they will view on Saturday. I know this because I have often had to advertise on Friday morning and still had numerous prospective tenants come through only a day later.
7. Saturday is THE big day for tenants to view properties. Different agencies will also open on Wednesday and/or Thursday, but make no mistake: MOST PROPERTIES WILL GET RENTED ON SATURDAYS. Now I should also mention that in some cities like Melbourne, Sunday is also a popular day for open for Inspections. In Sydney, I have tried opening on Sundays a couple of times but have never had a tenant come through.
8. According to REA Renters search by suburb first and foremost! They will type in the suburb and the suburb alone on most occasions! Why is that important to know as investors? Because it means that tenants have made up their mind already about where they want to live. Popular suburbs for tenants are popular for a reason. And that means that, if your amazing property is in the not-so-popular-suburb, don’t be surprised if it is hard to rent EVEN if it is located one street back from THE popular suburb. Tenants may simply never see it!
9. According to REA, after selecting the suburb…
- 81% of tenants will search using “most relevant” which is the default search mode. For the record, relevant search will always show the most expensive ads first.
- 57% of tenants will select the number of bedrooms they want to narrow the search,
- 52% of tenants will set the price range,
- 45% of tenants will select the property type, and
- ONLY and only 38% of tenants will ever tick the surrounding suburbs (further supporting the #8 theory!)
The stats and facts outlined above, are meant to give the reader – ideally a property investor – some insight into the one of the biggest stakeholders of their investment journey: the tenant! They will not make anyone an expert in tenant psychology and to be fair every vacancy, tenant, property, property manager and landlord is unique and one size never fits all!
Having said that, there are some common traits and behaviours that may help understand how tenants think and act! If there is one thing to remember from this blog, it is the fact that Tenants are normal people like everyone else. They are tech savvy, sophisticated and know what they want! If landlords and property managers don’t recognise this and fail to plan their vacancy management strategies accordingly, then it is possible that their properties will stay vacant for longer. Not the end of the world of course, but in a world where every day counts, this may be important!
Who we are:
NextGen Property Mgmt (www.nextgenpm.com.au) is a boutique Real Estate licensed agency that specialises in property management. NextGen Property Mgmt does NOT has a sales team. Our area of focus is residential property and we operate in Sydney Inner West, Eastern Suburbs, St George and South West Sydney. NextGen was created from its infancy to cater for investors as it was founded by investors who quickly realised that in a highly regulated industry like Real Estate – competence, expertise, care and service by property managers varies greatly.
As an investor, you need to have trust for and feel valued by your property manager. You need to know that your property and tenants are being looked after with minimal disruption, and you are getting maximum return on your investment. At NextGen we understand that, because we are investors living busy lives ourselves. Our promise to you, is that you will no longer have to worry about your most valued asset because we will make sure to take care of it as if it is our own. If you want to learn more about us just click here to organise a time for a chat. Or call us on 0414 494 840. We would love to hear from you and to share our story.