Locked Down… but not out!

19/8/2021

At the time of writing this we are 6 weeks into our 2021 Greater Sydney lockdown.

So future readers, will we be out of lockdown at the end of August? PLEASE let it be.

As Real Estate Agents in this current lockdown we really have to be grateful for the most part that we can continue working, albeit a lot differently but we can still work and carry out necessary tasks. Considering how many others are faring we must be grateful for that.

It sounds odd to write this but dare I say that, luckily enough, we know what the deal is by this stage. We also know how lockdowns work, their impacts and we know what help is available and to whom.

For Sydney what’s difficult this time around is that it feels like a backward step, having seen the economy here and the general mood improves over the first half of 2021.

In my world, the Property Management one that is, we had experienced a great year so far in terms of reduced vacancy rates, rents starting to stabilising and starting to increase as well. After 2020 I felt that we’d found our feet for sure and I think the sentiment is simply that we’ve all had enough of life with COVID-19 around us.

There is certainly less panic and shock that there was last year so thankfully, we still have tenants looking for properties, and those properties getting snapped up. People are still looking for new surroundings, more workspace to separate work & downtime, and trying new suburbs. As we’re now pretty well versed with our “new normal” we are definitely well placed to be able to give our clients, current & new, some certainty surrounding their investment properties especially when their property is coming onto the Rental Market during the current lockdown. While there may be some added concern because of some restrictions, we can thankfully follow the daily updates of the Real Estate Institute of NSW & Fair Trading to know what we can & can do as things evolve.

So, what’s happening at The Management Agency;

  • Plenty of one-on-one Inspections to show Prospective tenants properties, By Appointment & vacant properties only
  • Routine Inspections are delayed until restrictions ease, unless absolutely necessary, realistically we might need a couple of months to catch up on these
  • Urgent Repairs & Maintenance
  • Maintenance where tenants are agreeable to access & under a strict set of circumstances
  • Working through any requests for assistance via the assistance packages available to tenants & landlords
  • A steady stream of new clients coming on board with The Management Agency through July & at currently at capacity into September

As for our rental market, we’re yet to see any real impacts on rents or vacancy rates but of course, we’re monitoring and making any adjustments that are needed. Vacancy rates & rents are currently holding steady from what’s been a consistent year in lettings.

Aside from that, we are essentially working as per normal. Just like most other Sydney siders, we are trying to minimise our movements as well, with only the essential appointments taking place.

We’re here though, working from home as we always have. We just now have to be out of PJ’s and ready to go should someone want to see a property so that keeps us on our toes!

The new sign-off; “Stay Safe!”

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one service for his Property Investor clients.

For more information visit; https://themanagementagency.com.au/about/

Leases; To Renew or Not to Renew?

21/7/2021

Back in March 2020, I wrote about our New Leases in NSW following some changes to the Residential Tenancies Act & Regulations. Great timing huh, dealing with a pandemic and its impacts and making sweeping changes to how landlords and tenants view a Lease Agreement.

So it’s been a while now that these changes have been in but I still get calls and questions arising out of the blog I wrote about the changes. Titled To Renew or not to renew that blog can be read here.

As a quick summary though it goes through the Pros & Cons of this new legislation, and the potential impacts it might have (and has had) on owners and tenants, and the certainty that Fixed Term lease agreements once gave them that is now lacking. But I’ll summarise what the changes have done even further than that;

For Owners:

  • Resigning / Renewing a Lease to a New Fixed-term has little to no importance now because of how easy a lease can be broken
  • Owners see Periodic / Expired Agreements as more of an advantage as at least they are given 3 weeks’ notice of a tenant vacating. They also have not had to pay for a renewal to be signed.

 

For Tenants: 

  • Easy to Break a Lease but when they’d like some certainty of a Fixed Term Lease, they lose out with fewer owners offering them because of the reasons above.

 

So for Landlords, the options are;

    1. Not renew a Lease and have continuing agreement where tenants provide you with 3 weeks’ notice to vacate at any point

Or

2. Renew a Lease where tenants can break the agreement by paying a set break fee as outlined in my blog

So…

What has happened since these changes have come into place is tenants simply upping and leaving when they’ve found another property after a landlord has gone through the effort of finding them and the compliance measures that need to be fulfilled just before they get keys. The main concern for landlords is that you go through all of this and can now end up with a vacant property at any time. Realistically, the Break Fee isn’t covering the costs of reletting, vacancy in between tenancies, and so on.

Sadly now some owners only offer 6-month leases and no renewals, so whilst it was being heavily advocated that there be this leniency to Break Lease clauses when these reviews were being considered, who are the real losers here?  Long-term tenants seeking some certainty, or Landlords thinking that maybe investing in Property looks less attractive.

Speaking to the Real Estate Institute of NSW though, they’re sure that these terms are set to remain in place so like most things, pandemic included, we have to learn to live with them.

Am I being too dramatic about it all, too negative? Let me know in the comments below.

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one service for his Property Investor clients.

For more information visit; https://themanagementagency.com.au/about/

 

 

NSW Renting with Pets – The Strata Update

19/5/21

I’ve previously written here about Animals in Rental Properties but throughout 2020 we’ve seen some changes when it comes to several highly covered Tribunal and court cases battling for Pet Owners to have the rights to keep pets in Apartments. We’ve also seen COVID-19 effectively increase the number of tenants seeking approval to keep Pets in Rental Properties.

In some high-profile cases in Sydney, we see appeal after appeal where ultimately, it’s up to the buildings individual Strata Committee to approve or decline applications for Pets. In Strata Plans it’s generally up to the owners to decide what By-Law they adopt for their specific building.

If a building adopts a Strictly NO PET By-Law then it essentially doesn’t have any Pet Policy in place, a No Pet By-Law is not a valid one.

In New South Wales, the default is no longer to ban pets (as it was prior to a 2015 law change), but instead allow pets after you obtain written approval from the strata committee, which can’t be unreasonably refused.

However, this doesn’t consider a strata property’s individual by-laws. Even when legislation provides for the occupier of a strata apartment to have a dog, cat, or even bunny, that doesn’t mean you have the strata committee’s approval. As with all by-laws, each strata committee gets to choose which by-laws it wants to incorporate into thier strata scheme.

Even if your building is pet-friendly, prior to bringing a pet into your strata property you’ll need to send a written request to the committee seeking permission.

The application could require information such as:

  • A description of your pet, including his or her size, age, appearance and breed
  • Details of your pet’s disposition, for example, is your pet docile or friendly
  • Records of formal obedience or other behavioural training
  • Records to demonstrate that you are a responsible pet owner by having proof of registration, microchipping, de-sexing and all necessary vaccinations
  • Records of keeping your pet previously either in a strata plan or other residence, including references from your former landlords or neighbours that specifically mention the behaviour of your pet

In the application process considerations made will be;

  • The By-Laws for the particular building
  • The type, size and number of Pets
  • The size of the property vs the size and number of Pets
  • If the Pet will suitably fit in with the Strata Plan

Whilst applications can’t be unreasonably denied, I think it’s fair to say that a large active dog won’t be approved for a small apartment unless for instance, its owner takes the dog to work with them.

If you are in a rental property, under the current legislation the owner of the property is allowed to exercise their discretion on whether or not a pet is permitted by tenants in their individual apartment or unit. When seeking committee approval, a tenant’s application to have a pet should be submitted to them by the owner of the lot, not the tenant themselves after the owner of the lot has approved the keeping of a pet in the property, so essentially this two-step process has to happen before the tenancy can be sure to go ahead.

So, is it worth looking into further, Yes and I highly recommend reading through the following Q&A link and the recent Webinar at the links at the end of this Blog?

For Tenants – find out what the owner’s position is on pets first, if a Property Description doesn’t stipulate just ask the agent if they are open to Pets. When you’re at the property look out for other pets in the complex and therefore the By-Laws are likely to allow Pets.

Obviously, if the property is a house or not in a Strata Plan then your only obstacle is the landlord. What I don’t suggest is getting a Pet first and trying to get approval after the fact!

 

For Owners – it may be worth looking into getting a tenant approved with a Pet, as I’ve written before most Pet Owners are responsible ones and can become long term tenants. For the most part, renting to tenants with Pets is a trouble-free experience! If you’re unsure of your Buildings stance on Pets, read through a copy of your By-Laws.

 

For heaps more info on Pets in Strata the following links are a must from the team at Lookup Strata:

A very informative Q&A on PETS in NSW Strata can be found here;

https://www.lookupstrata.com.au/nsw-pet-rules-for-strata/

A Webinar discussing everything Pets in NSW can be found here; https://www.lookupstrata.com.au/nsw-strata-webinars/

As a Property Manager I feel, and know for myself, how beneficial pets can be to everyone’s life so it’s important to me for The Management Agency to encourage Pets in Rental Properties. Of course, this applies where we feel the property is suitable for a specific Pet & of course the Landlord approves.

In the end, there are factors that determine outcomes that are out of our control and I personally wouldn’t condone approving a Pet in a property where I feel it wouldn’t be good for a Pet’s wellbeing. In any case, applications are always considered and handled on a case-by-case basis and I think that’s fair on everyone.

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one service for his Property Investor clients.

For more information visit; https://themanagementagency.com.au/about/

Insurance that doesn’t Pay

29/4/2021

I’m like a broken record when it comes to Insurance, specifically Landlord Insurance.

I have written about it here on my blog, my #tuesdaytips on Social Media are constantly covering this topic as does my Client Quarterly Newsletter (Clients only, soz).

So why am I here again, out of pure frustration really?

Realistically, Property Managers aren’t inundated with work related to processing Insurance claims. It’s a good thing that claims are few and far between but it just seems that with some insurers everything is a battle.

Since COVID and the placement of the moratorium on evictions, halting landlords from evicting COVID Impacted tenants we know that insurance claims for Rent Arrears sky rocketed. Following that Insurers stopped offering new policies & have since increased premiums… I think we all understood why and the business case behind these decisions.

“Just because you have Building Insurance or other policies with an insurer, does not mean that they will be the best fit for your landlord’s Insurance”

My gripe though is more of a general one and while it might not be news to many it’s a warning to some about insurers exploring every possible avenue in which to avoid approving and paying a claim.

So that my rant isn’t an extended one here are some examples that come to mind as to why insurers have tried not to pay out legitimate claims;

Claim 1:

Rent Arrears following the Death of a Tenant.

The Period was the time between discovery and the family getting possession of the property back to the landlords

Issue:

Insurance did not want to pay the claim because we had not followed steps to chase the arrears or terminate the tenant for Rent Arrears.

We knew the tenant was deceased and terminated the tenancy under Death of Sole Tenant as per the normal processes. Insurance was not factoring in the moratorium or the fact that sending arrears notices was not necessary or very empathetic to the family.

Result:

Post some dispute resolution proceedings the claim was paid.

 

Claim 2:

Tenant Damage.
Tenant had been preparing food on the benchtops, leaving cut marks across marble.

Issue:

Insurance coverage did not cover damage that was accidental, Malicious only.

Result:

Insurance did not cover for what they called “Bad housekeeping”

 

Claim 3:

Rent Arrears COVID Impacted Tenancy

COVID Impacted Tenancy, the landlord had provided rent relief as per the NSW Govt Instructions however some months into providing relief the rent fell further and further behind. It was mutually agreed that the tenancy should come to an end. Arrears were left owing and a payment plan was not able to be negotiated.

Issue:

The Insurance policy only allows coverage of 2 weeks rent if the Lease was a Periodic Agreement, also known as a Continuing agreement.

An extremely outdated policy term that this insurer has had in place for many years but is being changed 1 month after our claim has been made.

Our argument here is that the majority of tenancies are periodic agreements after the initial fixed term has expired and more importantly, landlords and tenants do not have to renew a fixed term agreement. It’s like saying to a tenant at the end of the lease, you need to move if you don’t lock in for another year.

Result:

Pending as it goes through the Dispute Resolution process but it isn’t looking good!

 

It’s important to note that none of these insurers are specialist landlords’ insurers and more likely the companies you would use to insure your car with. Landlords should always stick to insurers that understand Residential Tenancy laws, the legalities and the limitations!

While I won’t name & shame and I can’t specifically recommend insurers It’s important that you, as a Landlord read the long-winded and PDS and ask questions.

THE PDS & Why you need to read it!

The PDS explains what actions can void your policy, how to make a claim and most important outlines what is covered and what isn’t covered. I’ve read a couple lately and while they are long-winded they make for an interesting read. If you’re going to buy a policy from any insurer, find their PDS and read it first.

I would really look at all insurers and just because you have Building Insurance or other policies with an insurer, does not mean that they will be the best fit for your landlord’s Insurance.

A policy that sounds good and is a fair price is what we look for but what they’re like when you go to claim is most important and there is plenty of info and reviews online about that.

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one service for his Property Investor clients.

For more information visit; https://themanagementagency.com.au/about/

Need To Know – Legislation Update

24/02/2021

I recently took over the management of a property and the lease was invalid for multiple reasons. For a start- the name listed for the landlord on the lease said “Contact Agent” and it only got worse from there. Landlords & Tenants need a lease that is valid, to begin with (obviously) and gives everyone some certainty surrounding their agreement.

2020 was a lot to take in, so to digest some of the legislation changes & recent updates so here I’ll briefly summarise what you all need-to-know!

NCAT Jurisdiction and why Leases were updated in Sept 2020

NCAT, short for NSW Civil & Administrative Tribunal, is the go-to Tribunal for disputes in Tenancy situations. NCAT can make enforceable orders on parties to resolve issues ranging from arrears to possession to damage claims.A little-known fact is that in some cases NCAT may refer the matter to Local or District courts if the landlord is not a resident of NSW. There’s quite a bit of reading on that matter here.Leases were just updated in Sept 2020 where landlords have to disclose their state or country of residence if it is not NSW. This may help NCAT filter through and decide on what matters they can and can’t hear even though they may have to be the first port of call.

The lease Agreement must have this specific info

Leases must now have tenants’ email addresses listed in order for tenants to give consent to receiving any notices or correspondence via email. Leases must also list 1 form of contact for a landlord, either a phone number or email address.

ID Requirements for Landlords

Before leasing or taking on the management of a Property, Property Managers must fulfil an ID Check for landlords to confirm their identity and their ownership of the Property. This has been in place where enlisting an agent to sell a property for some time but is new to Property Management

Information Statements for Landlords & Tenants

There is a new Information Statement each for Landlords and Tenants. Tenants have to be provided a copy on or before signing their lease. For Landlords, they’re required to read and acknowledge having read the statement before a lease is signed, an important step.

Material Fact Disclosure

Material Fact has been around for some time now but the facts that need to be disclosed do get reworked and reworded. For instance, Landlords and therefore agents, need to disclose to tenants if they are aware of any major rectification or works scheduled in a Strata Complex that would impact tenants during their lease. Essentially, a material fact is about sharing the information that you know whilst also protecting landlords if you’re not in the know.

Extension of the Moratorium on Evictions- extended & in place to 26 March 2021

Aside from a stop on COVID-19 Impacted tenant terminations, the moratorium also keeps in place extended notice periods to 90 Days’ notice for other forms of Terminations notices, such as for the End of Fixed Term & Breaches of Agreement.

The Management Agency wishes you all the best for 2021, I know it’s flying by already and we’re working away in what is already turning out to be a busy rental market with a lot of leasing activity already well underway which is already an improvement on 2020.

Thank you for your support, following, and reading!

Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

For what it’s worth?

14/1/2021

Happy 2021! January has been a busy one already and I really didn’t think I’d get to post here until next month but I thought it might be good to dispel a small myth about Property Management only businesses.

This only just came to mind while writing about this for issue no. 7 of my Client Quarterly newsletter (TMA Clients Only Sorry), reminding my clients to ask if they need up to date & free market appraisals of their properties.

So here goes, a quick blogs’ a good blog!

How does a landlord stay up to date with their property value with no Sales Agents on my team?

This hasn’t really come up as an issue or a concern of potential clients so this is more of an FYI for any of my readers or those curious to know.

Well, it’s simple really, I work with several Sales Agents in Surry Hills, Redfern, Darlinghurst that cover the areas that I work across who are always willing and at the ready to provide any of my clients with an up-to-date market opinion of their property. This usually involves a quick physical inspection of the property and for something broader a quick online appraisal can be carried out; it all depends on my client’s needs.

What my clients do like, sorry salespeople, is that unless they approve of being contacted directly then all of their information remains private & confidential.

So, there you have it, a very practical way of ensuring my clients have access to knowledge across their investment and at the same time have that provided to them with minimal effort on their part.


Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

Renting with Pets

21/10/2020

I’ve previously written here about Animals in Rental Properties, but through the course of 2020, we’ve seen several highly covered Tribunal and court cases battling for pet owners to have the right to keep pets in apartments.

Recently we’ve seen COVID-19 effectively increase the number of tenants seeking approval to keep pets in rental properties and whilst there are fewer obstacles getting pets approved in some properties, the issues surrounding approval becomes complicated where the property is part of a Strata Plan, a community of apartments or townhouses.

In some high-profile cases in Sydney, we see appeal after appeal where ultimately, it’s up to the building’s individual Strata Committee to approve or decline applications for pets.

In New South Wales, the default is no longer to ban pets, but instead allow pets after you obtain written approval from the Strata Committee, which can’t be unreasonably refused. This was a New South Wales legislative change which forms part of the Strata Schemes Management Regulations 2016.

However, this doesn’t consider a strata property’s individual by-laws. Even though legislation provides for the occupier of a strata apartment to have a pet, that doesn’t mean you have the strata committee’s approval. Strata Committees get to choose which by-laws it wants to incorporate into their strata scheme. Saying this, the recent unanimous ruling by three sitting judges from the NSW Court of Appeal, on a four-and-a-half-year battle between Jo Cooper (pet owner) and the Horizon building in Darlinghurst, now means that no blanket ban on pets will be permitted in any building anywhere in the state of NSW. You can read the article here, written by Sue Williams, Domain Reporter.

Prior to bringing a pet into a strata property, you’ll need to send a written request to the Strata Committee seeking permission. This applies even if your building is pet-friendly, and some strata managing agents may have a dedicated application form for this process.

Every Strata Committee will require different information but some of the information requested could be;

  • A description of your pet i.e. the pets breed, size and age
  • Details of your pet’s disposition, such as temperament and its activity needs
  • Proof of registration, microchipping, de-sexing, and all necessary vaccinations
  • References from former landlords, agent, or neighbours that mention your pet’s behaviour, particularly if you have previously kept a pet in a strata managed complex
  • Records of any formal pet training

In the application process, I feel that what’s considered strongly will be;

  • The by-laws for the particular building
  • The type, size, and number of pets
  • The size of the property vs. the size and the number of pets
  • If the pet will suitably fit in with the Strata Plan
  • Your personal routine i.e. if you work from home or take your pet to work

Whilst applications can’t be unreasonably denied, I think it’s fair to say that a large active dog won’t be approved for a small apartment unless, for instance, its owner takes the dog to work with them all day, every day.

If you reside in a rental property, you need to be aware that the landlord of the property is allowed to exercise their discretion on whether or not a pet is permitted by tenants in their apartment. In order to seek approval from the Strata Committee, the tenant’s pet application should be first submitted to the landlord (or Property Manager if managed by an Agency) for approval and then once approved by the landlord or agent, they will submit the pet application to the Strata Committee for you, so essentially this two-step process has to happen before a pet can be kept at the property.

“It is important to note that under the Hearing and Assistance Dogs Act 2009, any person who relies on a guide, hearing or assistance dog (and who has the right to be on a lot included in a community titles scheme, or on the common property) has the right to be accompanied their service dog, regardless of a strata committee’s by-laws on pets.” PICA Group.

So, it is worth looking into further.

For Tenants – find out what the owner’s position is on pets first, find out if there are other pets in the complex and therefore the by-laws are more likely to allow pets.

For Owners – it may be worth looking into getting a tenant approved to keep a pet, as I’ve written before most pet owners are responsible ones and can become long term tenants. For the most part, in my experience, renting to tenants with pets is a trouble-free experience.


Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

Repairs, Maintenance & Fair Wear & Tear

16 September 2020

Taking care & looking after a rental property is a shared responsibility between tenants, landlords, and the Property Manager if managed by a Real Estate Agency.

The landlord is responsible for ensuring that the property is fit to live in and that repairs and maintenance are completed so that the property is in a reasonable state of repair. The tenant is responsible for keeping the property reasonably clean and undamaged and leave it in the same condition it was in when they moved in (fair wear and tear excepted). If the property is managed through a Real Estate Agency, then the Property Manager will act on behalf of the Landlord and will ensure that the property is fit to live in and is the go-to person, for the tenant to report any repairs or maintenance issues that arise during the tenancy.

What happens when maintenance and repairs are needed?

A tenant should contact their Property Manager or Landlord (if not managed by an Agency) as soon as possible and report the maintenance and/or repairs that are needed.

The Property Manager will need to identify how the maintenance and/or repair came to light. Was it due to damage caused by the tenant or just wear and tear?

If it was damaged caused by the tenant, then the tenant will be responsible for the reasonable cost of repairing, restoration and/or replacement to rectify the damage, however, if it is wear and tear, then the landlord will bear the costs.

What is ‘fair wear & tear’?

Fair wear and tear, is a term for damage that either naturally or inevitably occurs as a result of normal use and/or ageing. Another way to look at it is, fair wear and tear is damage that occurs even when an item is used competently and with care and proper maintenance. This covers property fixtures and items that deteriorate over time due to daily use and/or ageing.

Some of these are:

  • Worn kitchen benchtops
  • Worn handles or hinges
  • Scuffed flooring on the carpet on high traffic foot areas

On the other hand, it is not, wear and tear when the damage to the property is due to an accident, negligence, or even malicious.

Some of these are:

  • Burns on kitchen benchtops
  • Holes in the walls
  • Stains or burn marks on the carpet

As an example, carpet has an expected lifespan of 10 years, and therefore wear and tear consistent with its lifespan is expected, so daily walking on the carpet will result in wear and tear.

However, excessive staining, like from a spilled glass of red wine would not be considered ‘fair wear and tear’.

Somethings aren’t always as clear cut, so your Property Manager will need to apply some common sense and ask the right questions in order to make an informed decision on whether or not the damage is ‘fair wear and tear’.

Saying that fair wear and tear is not always something that requires repair, but simply needs to be taken into account based on the age and economical life of a fixture or fitting. Fair wear and tear always has to be a consideration, for example, at a final inspection at the end of a tenancy.

‘Fair wear and tear’ forms part of a Lease Agreement

The NSW, Residential Tenancy Agreement (Lease Agreement) and the NSW, Tenant Information Statement both reference the term ‘fair wear and tear’. Fair wear and tear is the responsibility of the landlord, and tenants are not responsible for paying for ‘fair wear and tear’, however, tenants need to be aware that it is there obligation to leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, as at the commencement of the tenancy.

There is though, excessive wear and tear, which takes into account, how long tenants have resided in the property or how long it’s been since things like repainting or flooring have taken place.

Excessive wear and tear, is wear from use that isn’t normal and that can come from a lack of overall care taken or just too many people residing in a property, above what has been agreed, as noted on your Lease Agreement.

Tenants need to be mindful that the cost of repairs, or the restoration of, the premises or goods leased with the premises if it is a result of damage caused by the tenant, other than ‘fair wear and tear’, may be deducted from the bond.

Landlords, what you need is a Property Manager that knows the difference and can step in accordingly, and tenants, you need a Property Manager that’s willing to take the time to Inspect the property and explain what’s what.


Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/

COVID-19 & The Sydney Rental Market

18 August 2020

Far out! The media reports are so depressing these last few months…

There have been endless articles and news stories covering the impact that COVID-19 is having and the Sydney rental market in general. Articles covering the drastic drops in rents, record vacancy rates, and how the tables have turned with tenants having the upper hand are a daily news feature.

If you know anything about The Management Agency then you know it’s me, Antonio, from start to finish and that means I’m the one taking enquiries and showing properties and therefore I see what’s happening on the front line.

We are undeniably experiencing higher than normal vacancy rates, rents decreasing and a general negative sentiment when it comes to the Rental market and particularly in the Inner-City Areas that The Management Agency works within.

However! What I see, is continued movement of available rental properties. Properties are still being leased and there are many reasons why tenants are moving around from Property to Property.

The Management Agency continues to monitor the local Rental Market & it’s activity and advises its landlords on the best courses of action in the current market.

So, what’s up?

Let’s get all that negativity out of the way;

Yes, it’s taking longer for Properties to get leased

There’s a huge supply but the level of demand is still typical of the winter months. Why? Because prospective tenants are shopping around, they have choice and most don’t need to move or necessarily want to move but they will to find a better deal. They all get leased, eventually!

Rents are certainly not increasing

They’re either at a standstill or decreasing to meet the current market. If the property (or Properties in some cases) are advertising lower rents to minimise vacancy then that’s pushing everyone else down. Meet the market or sit vacant and wait it out – neither are ideal options but these aren’t exactly ideal times.

Short Term Rentals are saturating the market

Whilst this has slowed down, most of these properties are offered as furnished rentals, creating an influx of furnished properties. The demand for furnished properties has never been typically high, even prior to COVID-19 and therefore some landlords have unfurnished their holiday rentals simply to get their properties leased. Some will stay in the long term Residential Rental Market post-COVID-19, but I believe many will return to short term rentals once the demand for it returns. The influx of these properties has added to the supply levels and therefore impacting overall Vacancy Rates and Rents.

On the plus Side;

There’s demand for specific properties

I’m finding that specific properties are moving a lot faster than others. These are the larger terraces or the smaller terraces and smaller apartments, due to generally being rarer finds so there’s a demand for these niche properties as they are meeting a specific need in the current climate.

For example, a 5-bedroom terrace can lease in a matter of days as it’s economically making sense for prospective tenants to combine households and pool their expenses into one home. Makes sense, right?

As for downsizers, with so many tenants working from home, a couple sharing in a larger property can make their own home by downsizing and achieving their goal of getting out of shared tenancies and at the same time finding good value and a quieter more comfortable home to work from.

As I meet prospective tenants, I’m hearing first hand of people’s circumstances, circumstances that simply make it an opportune time for them to be looking to make a move.

Price them right and they’re leased within a couple of weeks. Any property that’s well cared for, updated and most importantly, competitively priced has been snapped up either at or very close to the asking rent.

Prospective Tenants are on the Hunt

So many people that come through my Open House Inspections are simply looking to move to save money. They’re in no rush to move, they don’t need to move but will if they find the right property and the best possible value.

Considering that we all spend so much more time at home these days, and in the inner city most people are working from home, tenants simply want to be happier at home. Prospective tenants are looking for more space, workspace, and somewhere simply more pleasant to be than where they are now. The way I see it, many are currently in properties that aren’t meeting all of their needs and that’s what they’re on the hunt for.

Current Tenants are doing the right thing

Current tenants who are happy with where they live are staying put and those that haven’t been COVID-19 Impacted are fulfilling their obligations. The tenants who are impacted and are demonstrating this to us, are entering into negotiations with some good and fair outcomes being achieved. These outcomes are ensuring that we can keep tenants in their homes as well as give our landlords some income certainty. At the same time, these agreements ensure we all come out of COVID-19 unscathed, once it is finally, well and truly under control.

Properties are still selling

More than 12 months into trying to sell my property, it sold well into COVID-19. Who wouldn’t want an escape to the Southern Highlands right about now.

We’re seeing the inner-city market still moving with some notable sales results being achieved. By all accounts, a lot more stock is needed as many vendors are holding off until sentiment improves and potential vendors are more confident in achieving a positive outcome.

Rents will increase… eventually

Rents always do increase at some point! Obviously, we don’t know when it could be sooner rather than later. I’m sure we’ll all be watching this space and I’m sure the media will be reporting as much when the time comes. My clients can be assured that I always closely monitor the rental market and will be kept in the know.

Your Property Manager, Me, is on the front line.

Well, this only applies if I’m already your Property Manager. Having a poor negotiator or a Property Manager not doing their due diligence in these times is costly. That aside, I’m the one showing properties, leasing properties, and listening to feedback. I know what’s happening and this way my owners know what’s happening as well. Direct from the frontline. That’s positive!

So What’s next?

If only I had a crystal ball. I can’t say I know for sure but there are some signs of Rental Stock gradually reducing as rentals come into line with the market and then come off the market altogether.

What we really need is for our Students to get back to school, all of us to get back work and get holidaying groups back into holiday accommodation – as soon as it’s safe to do of course.

At any point in time, the market has its ups and downs and we always align to its cycle regardless, we just need some movement back into the workforce and back into the inner-city suburbs.

Until then, we have to keep on keeping on and move with the market. Support our current tenants to the best of our abilities, and try to keep our heads up.

For now, I’m done with the word “unprecedented” and sticking to “perseverance” because that’s what’s needed.


Antonio Mesiti is the Principal & Property Manager at The Management Agency, a local Property Management specialist offering a one on one and end to end service for his Property Investor clients. For more information visit; https://themanagementagency.com.au/about/