Landlords…. Fed up and wanting to sell?

Date: 18 Nov 2021

You may want to re-consider… 

History has proven to me that the Real Estate market, in all its forms is constantly ‘self-correcting’.  With the Rental Investment market this can occur very quickly but normally corrections can follow the market by up to 12 months.

What are the factors that make it self-correcting?

Owning an investment property is a business to virtually all landlords. Owners are not offering a social service and simply want a good return on their investment.  When costs increase to the owner the rent has to go up to counter these expenses.  Recently owners have been barraged with cost increases and the ability to claim mortgage interest costs will also have an impact over the ensuing years.  

Some owners will choose to exit the Property Investment scene and sell up.  Often, these are owners with poor properties who simply are sick of all the issues that are inherent with them, owners with poor Property Managers who are simply not doing their jobs well enough or ones who are negotiating the minefield of self-management and realise how difficult and time consuming it is.

When these owners exit, there becomes a shortage in rental property stock and supply and demand drives all rents up.  These higher demands will in turn attract new owners to property investment and so the cycle continues.  Seasoned owners know this and approach the investment market with a medium to long term view and are aware that;

- All governments get voted out,

- New governments re-balance legislation,

- Picking a cycle is difficult but that largely becomes irrelevant with time.  It’s all about time in and not timing of the market.

- Good, well maintained properties attract good tenants who pay good rent. 

- Robust rent reviews that are supported by evidence are critical, especially now we can only do them once a year.

Luckily the majority of our owners are long term investors that have taken the advantage of super low interest rates and upgraded their properties while they are cash flow positive.  They are also aware that property will always be in demand, good property, even more so.