Does a construction site next door to your investment, impact residential rental values?

The mining boom might have faded, but there’s a new boom in WA as billions of dollars in infrastructure and developments are under construction and sure to impact the residential property market. If your property is next to a construction site it might be a good idea to look at tenant incentive options.

A landlord should treat his/her rental property like a business. As any business owner knows, sometimes you have to provide incentives to keep customers.

The same principle applies to landlords. Sometimes to keep great tenants and compensate for the noise/inconvenience of construction a landlord will have to provide incentives.

Rent decreases are a great way to convince excellent tenants to sign another long-term lease. For this to be profitable, you really need to run the numbers. A $20 per week discount for 12 months would cost $1,000. Considering vacancy and upkeep, you must ask yourself “will keeping these tenants for another year save me $1,000?” In most cases the answer is yes. With current vacancy rates sitting at an average of 7.6% (as at August 2017), and average rents across Perth now at $350 per week (which in the boom were at $470 per week), it is well worth your while to try and keep a great tenant and avoid vacancy.

Written by Annalisa Fonseca, Business Development Manager – Radi Estates.