Just as the seasons change every year, the cycle of renting available properties also changes. For any investor or landlord, it makes good sense to be aware of the different cycles and when they occur. As the cycles occur basically at the same time every year, this should be recognised. As property managers we try to do everything possible to handle the varying issues that each different cycle brings.
As it’s the start of another year, let’s begin this new year by explaining how the cycles come into play. Perhaps we can relate the renting cycles to the seasons, as the different seasons also affect the renting community!
Summer 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 – not so much at the beginning of summer, but certainly after the Christmas/New Year period. Those people who have children attending school or even University, also choose to move at the start of the school or Uni year. Therefore it makes perfect sense to settle into a new rental property before the kids start school. So the latter part of 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 at that time.
The summer period is usually quite a positive time in the rental cycle, in a normal market. Sometimes it can continue until the end of April, due to job transfers and even corporate transfers from overseas or interstate. It’s also the best time for rent 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 are also aware during this period that it can be more difficult to have an application approved, due to the number of people submitting applications on property, so they won’t usually try to negotiate rent prices.
As summer comes to an end and we move through the autumn into winter, we also move into another renting cycle. With the weather becoming colder, rental enquiry also cools! 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 – as a result there is less enquiry. Essentially people will only move in winter if they really have to! With less enquiry, demand also decreases and this 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 could be ‘spoilt for choice’ and that certainly puts another pressure on property owners and property managers alike!
As we move from winter into spring, it’s 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.
The changing nature of the rental cycle through the various seasons can be frustrating for property owners – it certainly is for property managers!
However, you should keep in mind that there is always someone looking for a rental property! The market never completely dries 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 I.D.P.M., 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 possible through our properties. Having set times for inspections also helps 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 must be dealt with straight away or they’ll go somewhere else. As mentioned above, they will also submit a number of applications on various different properties, 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.
As property managers we need to adapt to the changing market conditions that each rental cycle provides, otherwise we aren’t delivering our landlords the service they deserve!
If you have any queries about the property renting cycles or any other aspect of property management, please don’t hesitate to contact us at Investors Direct Property Management on 03 9868 7511.