Ashley Edwards
For many landlords, the focus lately has been on interest rates and market timing. But in today’s more balanced rental market, vacancy is often the bigger risk. Short gaps between tenancies can quickly outweigh the benefit of pushing for a slightly higher rent.
We recently worked with a client whose apartment was renting for $925 per week. The apartment market has softened, and there was a real risk of losing a great tenant at lease expiry time.
Rather than risk vacancy, the owner agreed with the tenant to adjust the rent down to $900 per week to retain them. Here’s how it played out:
Option 1: Keep rent at $925 and lose the tenant
- 4 weeks vacancy: $3,700 lost rent
- Advertising costs: $368
- Letting fee: $925 +GST ($1063.75)
- Total cost: $5,131.75
Option 2: Reduce rent to $900 and retain tenant
- $25/week reduction: $1,300 'loss' over 12 months
- No vacancy
- No reletting or advertising costs
The Difference:
Retaining the tenant saved approximately $3831.75 over the year.
In the current market, retention matters as tenants have more choice! Smart landlords focus on keeping quality tenants, minimizing vacancy, & maintaining their property well
It’s not always about chasing the highest rent, it’s about consistent returns. A slightly lower rent with a great tenant will almost always outperform a higher rent with vacancy.
