What type of tenants will my apartment attract?
Different apartments will attract different tenants and this is an important factor to consider when choosing an apartment to rent out. Depending on size, area and cost of rent will determine the type of tenant your apartment will attract.
At Apartment Specialists we can assist you making this decision. We know our buildings well and what types of people they attract. So whether you are looking for long term tenants, students, times when the property may be vacant to use for other purposes or some other reason, are all important factors to consider before purchasing an apartment.
Damage is caused more often in smaller apartment with a lower rent as well as higher turnover in tenancy rates.
University students will only want to rent the duration of the study year.
Having apartments closer to amenities i.e. supermarkets, bus stops and so on may be more attractive for tenants to pay more in rent.
Bigger and more upmarket apartments usually attract a different type of tenants where there is less likely to be damage and more likely to have long term tenancies.
Andrew Murray here from the Apartment Specialists talking about how different apartments attract different types of tenants. And how that is actually very, very important when you're looking at buying an apartment.
Now, a lot of people might be thinking "Okay, I'm going to be an owner occupier. Well that doesn't matter to me, because I'm not going to be renting it." What actually it's just as important, if not more important, because you're actually predicting who your neighbours are going to be.
You don't want to be having students next door, for example. So basically, when looking at an apartment you can get an idea of what kind of people are living in that complex, and some of the reasons why this is so important is because that different types of tenants will give you different kinds of, I suppose, either issues or advantages.
For example, vacancy rights. You have, for example, got a building that is very oriental or came from Asia. Often you have huge vacancy rates over November, December, and January period. Because a lot of them come for international education and they come for University, or I suppose, the language schools. Afterwards they go back home to see their families. So it's often very hard to rent those apartments in that, sort of, December-January period, which means your apartment can be left vacant for long periods.
Another one, for example, is tenants not paying their rent. If you're in a complex say, that has 300, 400 apartments and say they're, for example, below 40 square meters, two bedrooms, they're generally going to be the tenants that are, generally, going to be the male demographic. More likely they're going to have issues with money or simply just skip out and leave damage and unpaid rent with them.
Now, nothing is damaged, obviously, if you've got an upper class tenant. They're less likely to damage the apartment and do as much wear and tear, because people who are, say for example, executive tenants, will look after their place better because they have to take back clients, or whatever.
The other one is length of tenancy. So, a tenant that's in there for two or three years is ideal. One that's constantly changing means you've got to constantly be improving the apartment. You've got to be changing things, maintenance, have advertising, have pads which are vacant one or two weeks.
If you've got a large apartment that suits a family in a good location, then there is an example of one that is ideal compared to say students, which are only going to be there for the length of the university year.
Another one is rent fluctuation, and this is not so much I suppose a type of tenant, but the location is really important. If it's right next to university, or if it's right next to the CBD.
For example, right on Queen Street, you're not going to have as many issues because we all know there's more apartments being built. And with more apartments there's more supply, but if the location of the complex you're buying into is very central to whatever purpose it's next to, you're going to be in a very good position to always charge the highest rents, and have the least amount of vacancy.
I hope that helps and it enables you to think when you're looking at an apartment, it's not just about what the rent that comes in and the expenses that go out. It's about the clientele, or the people, I suppose the tenants, that will be providing that income. If your apartment is left vacant for a month or six weeks, well that takes the return down and the value of your apartment down hugely. Hope that helps, Andrew Murray, Apartment Specialists.
If you have any questions, flick me an email at [email protected] or call +6421 424 892 and I’ll be happy to help you with your queries.