All Topics / General Property / Vacancy rate

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  • Profile photo of Gembeau2Gembeau2
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    @gembeau2
    Join Date: 2003
    Post Count: 24

    Hi

    Can you tell me what percentage you use to estimate a vacancy rate in residential properties ?. Would 3% of the rental be reasonable or is 5% nearer the mark?

    Thank you
    Helen

    Profile photo of wilandelwilandel
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    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi Helen,

    With our properties, we look at each one, and work it out on an individual basis.

    In this hot market, 5% is probably wiser. Every town is different though. Some smaller towns have no vacancies.

    Good luck,

    Del

    Profile photo of Gembeau2Gembeau2
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    @gembeau2
    Join Date: 2003
    Post Count: 24

    quote:


    Hi Del
    Thanks
    Helen


    Profile photo of ErikaErika
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    @erika
    Join Date: 2002
    Post Count: 151

    Hi Helen
    We first learnt about vacancy rates while renting in Darwin. At 2% the owners had it good as most places got snapped up quickly but when the rate rose to 5% it became a renters market and owners may have to drop their rent to attract a tenant.We have rented now for about 12 years and found this to be fairly true wherever we go.
    Erika

    Profile photo of Fudge111Broz00Fudge111Broz00
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    @fudge111broz00
    Join Date: 2003
    Post Count: 245

    Hi everyone,

    So i assume what you mean by working out the vacancy rate is that if you were renting for $150 a week, then the vacancy rate would be around 5% *150, which is 7.5%, is this correct?

    Regards Fudge111[:I]

    Profile photo of ErikaErika
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    @erika
    Join Date: 2002
    Post Count: 151

    Hi again
    5% Vacancy rate means that if a PM has 100 houses on his books 5 would be vacant at any one time.

    Profile photo of Fudge111Broz00Fudge111Broz00
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    @fudge111broz00
    Join Date: 2003
    Post Count: 245

    Thanks Erika,

    So your basically saying it is all about your own judgement as to what the vacancy rate actually is, there is really no way of accurately working it out obviously?

    Regards Fudge111[:)]

    Profile photo of ErikaErika
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    @erika
    Join Date: 2002
    Post Count: 151

    Hi
    Most PM can tell you what it is. You can also watch for youself how fast properties come onto the market and then get rented, if they are rented as soon as available then the rate is normally low. If you talk to the PM you might find out if sometimes of the year are better than others like if you are near a uni at the start of the year lots of people are looking for accom.
    Erika

    Profile photo of Fudge111Broz00Fudge111Broz00
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    @fudge111broz00
    Join Date: 2003
    Post Count: 245

    Thanks Erika, I am just acquiring as much information as I can before really stepping into the property market, probably alot of the time at the expense of my reputation, lol[:D]

    Profile photo of shanebalshanebal
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    @shanebal
    Join Date: 2003
    Post Count: 16

    There are two ways of looking at vacancy rates.

    1. When I consider a property I always factor in a vacancy rate as a safety margin, no matter how good the property and how much demand there is for rentals. I use 5% of the gross revenue(rent).

    2. The other consideration of vacancy rates is the current level of empty rental accomodation in the area you are looking. Do some research with local letting agents to get a feel for this factor.

    Regards,

    Shane

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