It is important to remember that in the age of the internet, today’s tenants are quite market savvy. They have numerous sources of market research at their fingertips, so a quick scroll through what is available enables quick judgments to be made about whether a property represents good value. This also touches on the important issue of good advertising which I will cover at another time.

In short, tenants know when your rental pricing is above the market, whether they are searching the internet or inspecting the property and comparing it to others they have seen. In a relatively static rental market this can affect your ability to lease the property quickly. Remember, every week of vacancy loses the landlord about 2% of their potential annual income, so letting the property quickly and minimising vacancy is very important, (particularly when most landlords have to cover mortgage repayments when the rent is not coming in.

Equally, pricing the property below a realistic level means missing out on the best possible annual return. This is why being in tune with the current market conditions is vital, as it enables your property to hit the market at a lettable figure from the start. (It is also important to remember that market conditions can change very quickly in the ever-changing rental market in Melbourne’s north-west).

If you do the maths, it is easy to see how quickly an incorrect rental pricing strategy can damage your annual return. Reasonable pricing will also help you to achieve 52 weeks rent a year and avoid the pitfalls of high tenancy turnover, such as lost rent, increased costs for letting, advertising and maintenance which all accrue when properties are vacant.

Remember, if you are looking for genuine market expertise in the management of your rental property, you can call the Moonee Valley Rental team on 03 9319 1700.