Just as the seasons change every year, the cycle of renting available properties also changes. For any investor or landlord, it’s a good idea to be aware of the different cycles and when they occur so you aren’t taken by surprise. As the cycles basically occur at the same time every year, keeping track of them is fairly simple. It’s just really important that we’re aware of what needs to be done to handle the different issues that accompany each different cycle.
Lets start at the beginning of each New Year to see how the cycles come into play and relate the renting cycles to the seasons, as the seasons also affect the renting community!
The summer season is when people are out and about enjoying the warmer weather and perhaps changing jobs or schools. Funnily enough, this is also the season when most people choose to move to another rental property, or to another area with their job. It’s a nicer time of the year to move and much easier to look for available rental properties when it’s warmer. Those people who have children attending school or even University, also choose to move at the start of the school or Uni year – it makes perfect sense to settle into a new rental property before their children start school. So the summer season is always the best time to have property vacant or becoming available – for the simple reason that there are more people looking.
This period of the year is a great rental cycle and can continue until the end of April, due to job transfers and even corporate transfers from overseas or interstate. It’s always the best time for rental increases! More demand puts pressure on the rental market so it’s logical that rents can be more easily increased during this cycle. Prospective tenants know that during this period it’s more difficult to have an application approved, due to the number of people submitting applications on property, so they usually won’t try and negotiate rental prices.
As summer comes to an end and we move through autumn into winter, we also move into another renting cycle. As the weather becomes colder, rental enquiry also becomes ‘colder’! People are not as keen to move during winter as it’s just not as easy. They will only move if they really want more space or another reason that makes change necessary – so there is less enquiry. People will only move in winter if they have to! With less enquiry, the demand also decreases and that puts pressure of a different kind on the rental price. This is normally the time when prospective tenants will negotiate for a reduced asking price, as they are also aware of the reduced number of people looking for rental property and the amount of property that could be on the market. During this period, prospective tenants may also apply for 3 or 4 different properties as they are ‘spoilt for choice’ and that certainly puts another pressure on property owners and property managers alike!
As we move from winter into spring, its not always a good season to have available or vacant property. While spring is traditionally the best time of the year to sell property, it isn’t normally the best rental cycle. October and November can be extremely slow months with even less demand than during winter. Job transfers are due to come out at this time; children have exams and other end of year functions; people don’t want to move before school ends or before the Christmas holiday period – so all these things can have a significant impact on the rental market.
This rental cycle is perhaps the most frustrating for property owners – it certainly is for property managers!
However, there are always some people looking for rental property – without any doubt whatsoever. The market doesn’t completely dry up, there are just less people to work with. This is the time when property managers need to work much harder and certainly much smarter!
At Investors Direct Property Management we approach every rental cycle differently, simply because each cycle brings with it a different set of circumstances that obviously must be handled differently. For example, during the summer season, we need to be totally organised, to the extent that our department becomes almost regimented. We arrange our Open House inspections so that we can show as many people as we can through our properties. Having set times for inspections will help control those looking for property and allows us to plan our day and week more effectively. It also creates more competition for each property.
During winter and especially in the pre-holiday months, we have to approach the rental market quite differently. We will still hold Open House inspections, but if we receive any enquiry we’ll do whatever is necessary to show that property immediately. The prospective tenant won’t wait for any property manager who puts an inspection off ‘until Saturday’ – they have to be dealt with straight away or they’ll go somewhere else. As mentioned above, they also submit a number of applications on property, so the processing must be done immediately to capture the tenant. It’s a very different process again – but the rental cycles dictate what must happen if we want to rent property.
And property managers need to adapt to the changing market conditions that each rental cycle provides, otherwise they aren’t delivering their landlord clients the service they deserve!