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The true cost of rental vacancy

Every now and then it’s inevitable that your investment property will see a change of renters. After all life happens, people’s circumstances alter and even the best long-term renters may need to move on.

But the key is then to minimise the time your property sits vacant. Because even short periods of vacancy start eating into your profits, and the costs can quickly add up.

So let’s look at the true cost of rental vacancy, how to avoid it, and ways to minimise the downtime.

Cold hard numbers

As any investment owner will tell you, the cost of having a rental sitting vacant quickly adds up.  But let’s look at it in terms of cold hard numbers.

Say your property rents for $600 a week. If your property sits vacant for one week that’s a $600 loss. But if it sits for longer, things tend to compound. If a week turns into two, it’s $1200.

If it turns into four it’s $2400, which represents over 7 per cent of your property’s annual $31,200 gross income.

That’s why it’s important to minimise the down time in between rental agreements, but sometimes that’s easier said than done.

Why properties sit vacant

In an ideal world, there would be a week between your previous renters leaving and new renters moving in. In some instances, this turnaround might even be less, especially in a tight rental market like we’re experiencing at the moment.

So, why would a rental sit vacant longer than that? Often it comes down to poor management and poor planning.

Common reasons properties sit vacant for extended periods include:

  • Overpricing: Which represents the biggest reason why properties sit empty for longer than they should
  • Poor presentation: Cleanliness, minor damage, outdated fixtures, or lack of appeal.
  • Slow maintenance response: Renters move out sooner when repairs feel ignored.
  • Poor marketing: Poor photography, weak listings, or missed inquiry opportunities.
  • Rigid inspection times: Reduces renter access, slowing application numbers.
  • DIY management: Resulting in incorrect pricing or renter hesitation due to concern the owner may be overly involved.

Limiting the downtime

If you’re looking to minimise the downtime between rental agreements, it’s important to be proactive and prepared.

Once the previous renter gives notice, work with your property manager to:

  • Start planning the marketing of the property, including any required photography and copywriting updates.
  • Price the property correctly, based on current market data (not last year’s or what you hope for, but what the market indicates now).
  • Have the property manager organise reasonable inspection times.
  • Consider any property updates that might be required such as new paint, lighting, or fixtures to increase appeal.
  • Book your trades early, so maintenance, repairs, and updates can be completed in the immediate days after the current renter leaves
  • Partner with a high-performing property manager who will pre-qualify renters, run tight timelines, and communicate proactively to shorten the vacancy period.

How we can help

Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.

We manage every property as if it were our own and you can learn more about our property management services here.

Alternatively, if you are looking to rent a property, you can view the properties we currently have available here.

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