Understanding the vacancy rates of an area is an important step to take when you are
doing your research, not only will it help you understand whether or not it is going
to be easy to rent your property and you are going to get the rental income that you are
expecting but it can also be an indicator of future growth, because its vacancy rates
are extremely low, that means demand is greater than supply.
Hey, this is Ryan from onporperty.com.au, your daily dose of property education and
inspiration.
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This video that I am going to go through help to find out the vacancy rates open area.
If you want more details about how vacancy rates are calculated or why it can be an indicator
of future growth, then go to www.onproperty.com.au/111 to episode 111 where I go into more detail
on it there.
They say that healthy vacancy rates of an area tend to hover around that 2-3% mark or
lower, so if you see upwards of 4 or 5 or even higher percentage of a vacancy rate,
then that would be a red flag for me, it’s not that it is going to be a bad investment,
but it just means that I would need to do more research before I would go ahead.
So to find out vacancy rates of an area, you can do it two ways, you can do it old school
and you can do it new school, so the old school way is to grab a property magazine like this
one as trying Property Investor, this is the April 2014 edition that I am going to be using
in today’s video.
Now, towards the back of the magazine, they actually have a section which I will actually
show you, you can see it’s called ‘Vacancy Rates’, so it actually shows you all the
vacancy rates of the suburbs here, so let me turn the camera around and we’ll have
a look at some vacancy rates of an area.
Okay, so here we are, let’s just zoom in so that you can see what data you are getting.
It is firstly organized by postcodes, it will give you an example of suburb which may be
the only suburb in that postcode, well there might be a couple in there and it’s only
going to show one and it also shows you December 2012, December 2013 and these dates may be
different depending on what magazines you buy, but it gives you the amount of vacancies
and the vacancy rates for both years so we can see this top one Wattle Grove – 19 vacancies
at 1.5% and then 20 vacancies at 1.5 percent, so basically it stays the same.
So whatever your postcode is you can go and have a look, you can see here Bass Hill 0.4%,
Georges Hall 0.7%.
A healthy vacancy rate is generally somewhere between 2-3% or less, we can see Kingsgrove
is 5%, so I want to do more research before going into Kingsgrove and investing in there,
just to make sure that all the figures are looking healthy, and we look at this one here
which is Willala, you can see vacancy rate of 11% and 12% and over a small of properties,
so it must be a small area, so basically that is how you find vacancy rate in a magazines,
really really simple to do.
The other way to find out vacancy rate is online and I am going to jump on my computer
which is over there and show you how to do that.
The best tool I found online to find vacancy rates is this tool by SQM research, so you
can find this tool by going
to www.sqmresearch.com.au/terms_vacancy.php . The other way that you can find it is to
simply go to google and to type in ‘sqm research vacancy rates’ and if you search
that then the top one that comes up will be that one that I just told you the address
of.
The other way is if you are an On Property Plus member then on any page, look down the
bottom and you have all your icons, there is one called vacancy rate so if you click
on that, then that will simply take you to this sqm page and so it’s really easy to,
you guys don’t have to remember anything if you are part of On Property Plus, so to
use the tool simply click I’ve read the terms and conditions, then click here to see
vacancy rates by suburb or postcode, so that way you can go really granular and then all
we do is simply type in your suburb or postcode, so let’s do chronologically 2230 and click
go and it will then show you the vacancy rates for that suburb.
You can see here starting January 05, well that’s not a great deal useful to us but
if you scroll across to the side then you can see you’ve got data up to March 14,
as I am recording this, it’s actually May 2014, so it’s only two months old so that’s
really good to have that data and you can see here the trend of vacancy rates over time
and how things progress so its super easy to use, all you need to do is type in the
suburb that you want and you will get vacancy rates and obviously if you see a graph like
it’s going like this for years and just consistently going up and up, then maybe that’s
something you should be worried about but, I know that Quenella is a pretty vibrant area
and you can see here ranges between 1? % to 4% on the bad months.
So that’s how you find vacancy rates, super easy to do.
And inside On property Plus which is my exclusive members area, I am also going into more details
about how to research an area, how to find out about the demographics of an area, what
type of houses people want, how to find government housing, and how to look at a bunch of other
factors that are really important when you are researching an area.
Basically, what I want us to do is to put together everything you needed to become confident
enough and know the area well enough to go ahead and invest, so if you are not a member
yet, then you are crazy and you need to head over to www.onproperty.com.au/plus right this
second, check out the video over there, find out what it’s about and sign up today, because
memberships are limited and they are filling up fast, I expect to sell out within the next
month or two.
So until tomorrow, remember, your long-term success is only achieved one day at time.
I will see you guys tomorrow.