Michael Quinn 01 June 2015 News

Rents and Property Management – it is your cash flow

Ask any property investor what is their main concern and the overwhelming response is the fear of not having a tenant or having a bad tenant.

Firstly, provided you are investing in a location that people want to live in and that has all existing infrastructure with a demand for housing and a low vacancy rate (ideally less than 3% so that you are not competing for your rent) , then you should be able to continuously have tenants in your investment property – especially if your rent is on or just below market rent.

Then, being correctly insured so that you are protected form all angles and working in with a good Property Manager that screens your tenants and works with you – should see you and your cash flow adequately protected.

What is the average rental growth for properties in capital cities in Australia?

When preparing reports for our clients, we often get asked as to why we set the average rental growth at 4%. Although this can vary from year to year, we can see in the graph below that covers the last 10 years in all the major capital cities, rental growth has averaged at between 4 – 4.5% per annum.

Annual change in rentals rates over past 10 years

anual-change
Data Source; April CoreLogic RP Data Rental review

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