This year's 8% increase in average income from Aussie rental investment portfolios is the largest since 2008. However, for most, our housing/rental investments did not translate into real money profits for this financial year.

 

 

It's now cheaper to rent in Sydney than Broome!

 

Melbourne peaked at 15%, Brisbane on 20%, while Sydney siders lapped up an impressive 24% increase in their house prices this year. Will this boom end as predicted, or will our trending highs continue as Broome sweeps the floor with a 45% upgrade on their rental income to win the year for investors on a high?

 

Regional, as opposed to capital cities, were the beneficiaries of massive increases that now see Hobart, Perth, Canberra, and Darwin as the leaders in this year's rental income wars. Capital cities remained stagnant or dropped as Covid decimated the city's property market and led families and singles to search for better digs, more space, and a sea change.

 

 

More of us are seeking out bigger spaces.

 A better lifestyle and no excessive travel to workplaces 

 

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As we moved to work from home, our lifestyle pivoted to better homes with greener pastures compared to current city locations. It came with a considerable increase for rental homes in hot demand (Broome) as average rental property prices soared as we wanted to move and rent somewhere a little more serene as we spent more hours at home than we have ever before.

 

Adding to this shift was a considerable decline in rental applications for smaller and dense pop units as bigger city-dwelling suffered more declines in rental margins compared to regional Oz.

 

 

 

It's left us reeling in wonder about Australia's residential property market and what changes to our income may happen in the foreseeable future if the naysayers are correct.

 

2022 is fast approaching, and as we move into the next financial year, most banks and reports within the industry are all screaming that we may be heading for a considerable downturn. Sure, it will be down to location, location, location as always, but this shift may be moving our love of a major city to a much less hectic place.

 

If we add this decline in rental profits with the impending possibility of a significant correction in the residential property market as projected by most substantial players and banks in the coming few years. Where then should a rental property investor look to hold on to or recoup any of these possible losses and better handle a downturn in our rental incomes?

 

When capital city renting remains stagnant or shows signs of dropping as more families and singles search for lifestyle over location, a lot of us who rent (me included) are moving in the same direction – away from the big smoke and into better rental opportunities elsewhere.

 

 

With the move to more full-time working from home, our lifestyle and these types of dwellings are becoming more imperative compared to our home's location. 

 

The more continuing uncertainty in the next few years, depending on how the virus, economy, and border openings play out, will likely extend this new trend of renters and buyers seeking less city-based properties with more lifestyle offerings.

 

Properties in hot demand attract more renters, and accommodating these changes to your investment portfolio and strategy, will help you capitalise on these renters seeking out this type of home.

 

Investigate and chat with your current PM or agent, as there may be a more substantial and viable business investment opportunity in smaller town rentals. 

 

Instead of putting your hard cash into a massive block of units that may not be so easy to fill anymore, or worse, require a reduction in rent to compete with the thousands of vacant units available, is it time to let your agent go. Should you look into and start self-managing your property portfolio to make ends meet or sustain current margins?

 

 

The leading opportunity for property investors when making business decisions about renting residential properties is to stay informed of any changes to the marketplace. 

 

The most significant industry changes are the same as everywhere else; it's the technology that allows more and more Australians who have investment properties for rent to operate the whole business themselves through applications like Instarent.

 

 

Agents are on the way out as running a compliant rental portfolio is now an easy process. 

 

Instarent's management solution for residential property owners and investors is the leading app throughout Australia. It is the fastest-growing segment for self-managed property owners seeking more income and control of their rent, tenants, and cash flow.

 

 

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If you outsource your property portfolio to a managing agent, it may be time to look around and see where the market is heading today and where it may end up tomorrow.

 

Most of us are aware that an agent prefers to rent your property cheaper than you ever would as it's more about the rental than the income from their point of view.

 

The negligible cash difference is slight to them compared to the kudos of renting it out. However, when the difference can make or break your property portfolio profits – it's now a must to look around at alternatives that can recoup some of the potential losses the industry has foreseen for the next couple of years.

 

If you're thinking of self-managing your rental property or have doubts about your current setup with your agency or Property Manager, get in touch with Instarent.

 

Our team of professional property managers and staff are live on hand in Oz to answer any questions or assist you in moving to manage your portfolio of rental properties.

Get in touch with us

 

 Until next time and thanks for yours!

 

 

Sam Bloch

Author

Sam Bloch

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