This is one of the most common questions asked of property managers. It is important to remember that as your property manager, unfortunately we are not the gatekeeper of rental values. Rental levels, like sales values, are determined by the market. In other words, what a tenant is prepared to pay for a given property in a given moment in time.
To determine the rental value of your property at the start of each tenancy and during tenancy, we compare your property to similar properties on the market, properties which have recently leased and consider the current demand for rental accommodation and the likely vacancy period. Currently in the Newcastle region, REINSW have recorded the vacancy rate in their latest survey at 2.6%.
During a tenancy, we consider the above and the nature in which the tenancy is being conducted. For example, the market rent may be $5 more per week than the current rent on your property, but you have a tenant that is paying the rent on time and taking care of the property. With a situation like this, we will discuss with you the benefit of increasing the rent versus the cost in lost rental through vacancy if the tenant elects to vacate.
If your tenants lease is due for renewal, we will complete a rent review 3 months leading up to the expiry of the lease to ensure that if a rent increase is issued, it will commence at the expiry of the current lease. If your tenants are on a continual lease, we will review your tenants rent every 6 months.
As your property manager, we are also asked what the sale value of your property may be. When asked this question, we will refer you to our sales team who will give you guidance and an estimate of the current sale value of your property. Please keep in mind that we refer you to our sales team not as an opportunity to convert your enquiry to a listing, but to ensure that you receive the most current and accurate estimate of your property.