Now 2025 is upon us, as a rent roll owner, you’re probably wondering where things are on the real estate roller coaster of highs and lows.
While there are always new opportunities if you have a great team, quality systems and good customer service, there will be factors influencing where new clients are coming from and your overall profit margins.
Here’s a look at the changes, updates and challenges in store for 2025:
Rental property legislative changes
Ever-evolving rental property legislation is part of the reason why investors need property managers in the first place.
The latest changes reflect current conditions in Victoria, where vacancies are low and rents are high. These updates, unfortunately, threaten to impact income and the overall investor experience, so it is important to prepare your property owner clients for what’s to come.
The ‘ones to watch’ include:
No-fault evictions ban: A proposed ban on no-fault evictions aims to provide greater stability for renters but will make it difficult to evict tenants who pay on time and don’t break the rules but take a lot of time and effort to manage. This update will make it even more important to select renters wisely and set the right price from the start.
Rental minimum standards: Changes to minimum rental standards, including energy efficiency requirements, will mean upgrades to some properties are unavoidable. Again, it will be a matter of giving your clients warning ahead of time and working with them to budget for the changes.
Short-term rental levy and Vacant Residential Land Tax (VRLT) expansion: A short-term rental levy and the statewide expansion of the VRLT may incentivise some investors to shift their properties from short-term to long-term rentals. This could lead to an influx of new properties for long-term lease, which could potentially benefit your agency.
Investor sentiment
According to realestate.com.au, higher taxes have prompted a few thousand Victorian investors to sell during 2024. This doesn’t mean everyone is ‘quitting’ their investment but there are factors putting pressure on property owners.
At the moment, investors have the following on their minds:
High interest rates: The RBA’s December announcement provided no relief for borrowers who are pushed to the limit. Some investors may find the numbers no longer add up after a financially stressful year. However, economists are still saying there will be relief at some stage in 2025, so it’s worth hanging in there.
Market stabilisation: Following a period of rapid price growth, the Victorian property market slowed down in 2024. It’s frustrating for investors seeking capital growth, but can potentially bring new players into the market.
Melbourne's investment appeal: The pendulum always swings and a period of lacklustre growth is always followed by a spike. Savvy investors will be looking at Melbourne’s forecast population growth and buying in locations with capital gain potential.
Strategies for success in 2025
In light of these factors, as a property manager or rent roll owner, keep the following strategies in mind:
Focus on client retention: Building and maintaining strong relationships with your clients and renters will be important in 2025. Providing exceptional customer service, clear communication, and proactive management will foster loyalty and goodwill.
Embrace technology and outsourcing: Costs are rising, so look for ways to offset them. Can AI or other tools support your team, or can you investigate introducing an offshore team to manage administrative tasks?
Spread the word: You’ll need to stay up to date with legislative changes but don’t forget to tell your team and clients about them so nobody can claim ignorance if an issue crops up.
Diversification: Exploring opportunities to diversify and expand your rent roll across different property types and locations can mitigate the risk of a lower-confidence market.
There will always be changes and disruptions in property management, and 2025 will be no different. Focusing on the things you and your team can control will make all the difference to your success in what still has the potential to be a highly rewarding industry.