Imagine that you are an investor who is about to purchase their first investment property. Wouldn’t it be great to know – before you purchased -what the market demand is for that investment property? Then you would know your property can be leased quickly by good quality tenants.
This valuable insight is called “Vacancy Rate”.
What are vacancy rates?
‘Vacancy rate’ is defined as a percentage (%) of overall rental properties that are “listings that have been advertised for 3+ weeks (and are still currently advertised as at the time of collation)”.
Why is vacancy data useful?
The vacancy rate essentially describes how much competition is in the market for rental properties. It provides a strong indicator of what demand there will be for an investment property, and whether a certain locality will likely have difficulty finding tenants.
Healthy Vacancy Rates
A vacancy rate of 2.5% is considered ‘healthy’ as it’s considered the equilibrium point at which the market is evenly balanced between rental properties available and renters looking.
Low Vacancy Rates
A very low vacancy rate below 1.75% signifies high rental demand, requiring more rental properties on the market to fuel this tenant requirement.
High Vacancy Rates
On the other hand, a high vacancy rate above 3.25% shows the market has more stock available than is required by the tenant pool interested in that suburb.
Ideal Vacancy Rates for Property Investors
For investors, a low vacancy rate environment is ideal to operate within as it may provide the following benefits:
- Potential greater selection of applicants and therefore greater chance of being able to select a quality tenant;
- Potential for increased rental rate as the tenant market competes for limited properties;
- Your investment property will be earning an income quickly.
Contact Position One Property for Updates
The Team at Position One Property make it our business to know the current vacancy rates in Brisbane and South East Queensland suburbs. Call us today to enquire about the suburb you own property in – or would like to own property in!
We manage property in theses suburbs CLICK HERE.