Spotlight On The Market | September 2018
As the weather warms, our Shire braces for its peak property season.
An influx of tenants looking for the summer of their lives in the greatest part of the world is music to the ears of those who have invested their ‘one-day’ dreams in our towns, in the form of owning rental properties.
With disruption, though, there have been some challenges for both tenants and landlords alike as everyone adapts to the new economy.
We caught up with Sophie Moir of Byron Bay First National who has been leasing and managing investment property in the Shire for more than 10 years. Sophie was born in Byron and by helping others achieve their dreams with property, has become a local property owner herself. A unique and valuable insight into leasing and renting in Greater Byron.
How long have you been leasing in the Shire?
I have been in the real estate industry for 11 years and leasing since 2013.
What trends have you seen in the rental market that are impacting tenants and landlords?
Airbnb in Byron Bay is impacting the permanent rental market. This was one of the factors in driving up the rental prices, because of the scarcity it creates in long-term tenancies. A lot of investors can see there is a potential to achieve high rents for short-term leases, although they can forget about the work it takes to changeover properties each time and the marketing for those arrangements doesn’t take into account some of the vacancies that can occur, particularly in the cooler months.
Consequently, tenants are finding it difficult for long-term housing and to afford to live here, while many owners are finding themselves with the increased overheads involved in a short term let – only to see themselves exposed with the uncertainty of income and the swollen supply of short-term accommodation options in towns like ours.
There is definitely more peace of mind with permanent, long-term tenants – ones who take on guardianship of the property and who choose to become a part of the community here.
What do tenants want?
I think one of the upshots of the disruption has been an increased understanding of the value of steady long-term tenants. The tenants we are seeing want a sense of ‘home’ which means that they are looking for longer leases, which we would consider to be 12 months or more.
Like all consumers, they expect value for money, in terms of the rental price and market conditions. What I have also learned is that the tenants who are seeking to make a rental property in their home, look for signs of owners who are willing to maintain their property. Houseproud tenants almost always gravitate to the well-maintained properties of house-proud landlords.
What are some of the reasons people buy rental properties in Greater Byron?
There is a high demand for permanent rental properties in Byron Bay, and this translates into solid returns which is what investors ultimately look for. There is an idea that people will buy investment properties in order to eventually move to Byron Bay, however, we find that that isn’t the case mostly because the type of property that makes a good investment is not always the same property that this demographic is seeking as a permanent home.
Who are your typical tenants?
Our typical tenant profile is that of a young working professional couple or share-house arrangement, as well as families, who are local and aspiring to buy in the area. It is a very different cohort than those looking for short-term accommodation.
Who are your typical landlords?
Interstate or out of area investors who rely on our local knowledge and community roots to find them preferred local tenants who will care for the property.
What can landlords do to make their property more attractive to tenants and achieve a premium price?
Update the property and have the property well presented. A well-presented property will attract a higher quality tenant and a well-maintained property will keep a quality tenant. I believe having the property clean and tidy at showings attracts ideal tenants.
What makes a good tenant?
Reliable, trustworthy, houseproud, friendly to talk too and have a stable income.
How do market trends impact the price of individual tenancies, either new lets or rent reviews?
We just came out of a very hard winter market. We saw a lot of the short term holiday properties (or Airbnb) come into the permanent rental market at the same time. A lot of people leave the area in winter as there isn’t enough work in the hospitality/ tourism trade. It can mean an adjustment of rents in order to make a market when there is lower demand.