Vacancy rate know-how

Real estate buffs use the term “vacancy rate” with knowledgeable flair when talking about rental trends.

“But closer analysis reveals that many people do not know how to calculate vacancy rates,” Bellarine Property managing director Christian Bartley said. “In fact, many people don’t even know what information the percentages actually convey.”

According to Mr Bartley, there is a very simple formula for working out the level of vacancy in your area.

“The easiest way is to use a calculator,” Mr Bartley said. “Just enter the total number of properties actually vacant and express it as a percentage of the total number of properties available to rent.

“If the figure you arrive at is 2.75 percent or less, you can give your area the thumbs up as far as investment potential is concerned.”

Mr Bartley said that in practical terms a vacancy rate of 2.75 per cent means investors should allow for their property to be vacant for 10 days every year.

“This is considered a reasonable number of days to allow for tenant mobility. However, when vacancy rates rise above 2.75 percent, investors have difficulty locating tenants and downward pressure is placed on rent levels.”

According to Mr Bartley, the reverse is also true: when vacancy rates fall below 2.75 per cent tenants experience difficulties in finding properties to rent and upward pressure is placed on rents.

“Knowledge of vacancy factors over a period of time is an important tool in maximising security and minimising risk when purchasing investment property.”

For more information, phone Christian Bartley on 0410 695 325, email [email protected] or head to the website at bellarineproperty.com.au.