I note many properties advertised in the Kiama and surrounding areas remain untenanted for many weeks, some well over eight weeks. A change in the landlords’ approach can and may resolve this easily with some creative forward financial planning and thinking. 

I also note the large numbers of people viewing Open Homes, showing the demand for good quality properties at a reasonable rental figure. Could it be the rental being asked is too high for what is being offered? 

I have seen some poorly presented properties at inflated prices. This is shown by the number of properties being empty for long periods. 

Note, figures are based on a 52 week period (not a calendar year):

• If a rental property is rented immediately as advertised for $700 per week, this gives a gross income of $36,400 for 52 weeks.
• If the property is listed at $700 per week and is empty for six weeks, the loss to a landlord is $4200 per the 12 month period.
• Amortised over a 12 month period, equals $80.76 per week loss while the property remains vacant.
• After the six weeks vacancy, the gross income for the 12 months is then $32,200 per annum or $619,23 per week.

Suggestions and Possible Solutions

If the property was rented after six weeks at a lower price at $650 per week, it gives a gross income of $33,800, being better than $32, 000 by having the property empty for six weeks before being rented. This gives a landlord a gain of $1,800 over the 12 month period by simply reducing the rent.

And it only gets worse if the vacancy time continues … 

If the property is vacant for eight weeks, the sums start to get alarming. Property is empty for eight weeks at $700 per week loss. This equals $5,600 per annum loss over the expected income of $36,400. This gives a loss of $106.69 per week or $5,547 over the expected 12 months, giving an income of $30,853 per annum.

If the property is rented immediately for $600 per week, this gives an income of $31,200 per annum with no vacant time. This is gain in income of $1,347 per annum rather than stick with the accumulating loss having a vacant property.

This should allow for a landlord to negotiate a better rate at renewal time by having a happy long- term tenant or get the better rental return in 12 months’ time. Happy landlords and content tenants makes a happier community