'Healthy' rental market means good news for investors

MORE rental properties are popping up in Ipswich but there is still plenty of competition for places and that equals good news for investors, latest figures show.

The figures released by the Real Estate Institute of Queensland showed Ipswich's rates jumped from 'tight' to 'healthy', with June quarter vacancy rates sitting at 2.9 per cent.

First National Action Realty Ipswich business development manager Venita Daw said a low vacancy rate means more confidence in the market and more security for the investor, as the cash flow avoids lengthy periods without a tenant.

The vacancy rate is a measure of how many rental properties in a location or market are currently without a tenant.

"For renters, low vacancy rates mean more competition against them when seeking a new rental property and the possibility that they will need to view and apply for multiple properties before being approved," she said.

"It can also mean that they may need to pay a higher rent to find the home of their choice. Renters need to allow four-six weeks to find a suitable property when a market has a very low vacancy rate.

"A low vacancy rate is a measure that there are not many rental properties available across the Ipswich area which are currently vacant and also taking into account the number of people looking for properties to rent."

Ms Daw said a low vacancy rate means better yield for property owners.

"Vacancy rates are not just a measure of cash flow and income from your tenant. It can also be a growth indicator. A location with a low vacancy rate means there is demand in the area and a potential under supply of housing," she said.

"This means that a property should not stay vacant for long as there is always demand from someone new to rent the property.

"If there is demand from the rental market, it is safe to assume it is a desirable area to live. Desirable areas attract home buyers and renters alike.

"If a location becomes attractive to live in, tenants will move there before home owners. They will put downward pressure on the vacancy rate making the location appealing to an investor to buy there. If home buying and demand in an area increases, what typically follows is capital growth.

"What property owners do also need to remember is, value to also added to properties which are well maintained.

"These well maintained properties will be more appealing to a wider range of renters and these properties will have a lower vacancy rate. They also have the added advantage of attracting a better class of renter."

Ray White Ipswich business development manager Madison Galloway said the local vacancy rate tends to stay "pretty steady".

"This means tenant may have a little competition when applying for a property and for a landlords they are likely to secure a tenant quite quickly especially if the home is suitable for families as that is the main demographic of the area," she said.