Landlord's Message from Milton Rendell - June 2017

As I write today I see the headlines in the West Australian stating the market appears to have bottomed or close to bottoming and is a great time to buy. Also sighting that rents will stabilise with improvement in the established home market, an interesting broad sweeping statement. As you read the article it talks about the market will finish bottoming in 2017. Then showing improvement in 2018.

Being an agent and a landlord, this should be good news, and yes I think we will see improvement going forward but being honest, for all of us the last eighteen months have been tough. The market isn’t like a light switch you can’t turn it on when you want unfortunately. It will take time and will affect people in different ways depending where you are in your personal circumstances. If you are cashed up and have equity to use as collateral this is excellent news as you now have the opportunity to buy into a market that, in theory, is on the rise in the coming years ahead.

In the short term there is still a period to wait for landlords as the market still has an oversupply which will subside but it will take time. How long? I wish I could tell the exact date it will happen but even after thirty years in real estate I still have not been able to pick an exact time for when it will be better but I do believe in the coming six months we should start seeing some positives. I am going to be careful in my predictions.

I think it’s a great time to sit down and look at your own personal goals in terms of wealth management and explore what you can do in this current market because there are some excellent opportunities out there. With interest rates still low and although rents have decreased they have come down from some incredibly high returns to still fair returns. So the opportunity to increase your portfolio is there to enter at a more affordable position than three years ago.

Our finance arm Plus Loans has seen inquiry on the up with investors looking at what they can do to first improve their current situation and also determine what they can do in the future. Daniel of Plus Loans can help you if you have any questions at no cost and hopefully maybe save you some money as well as time. Despite some of the talk in the paper we are still seeing higher than normal vacancy rates so the pressure on rents may still continue for a little while but hopefully not for too much longer. I think my suggestion for everyone is get cashflow through your rental best you can in the short term rather than having a property empty and affecting your cashflow and then as things improve go with the market.

Naturally quality of tenant is always important but there are plenty of good tenants out there still sadly who are struggling as well due the increase in unemployment. Fingers crossed, hopefully we are on the edge of some real improvement and we can smile more again in the future.

Milton Rendell,
CEO & Managing Director