OWNERS: How to maximise the return on your rent
To stand out in a competitive rental market and maximise your rental opportunities check out our handy list of ten tips to start the new financial year with a bang!
Cosmetic touches lift rent and equity at the same time.
Painting the walls, new carpets, blinds and light fixtures can really transform your property and give you a great boost to cash flow as well as some depreciation benefits too.
- Longer leases
Six-month leases aren’t ideal as they can equate to two letting fees and two periods of vacancy each year.
Instead, aim to secure tenants for longer leases such as 12-months, meaning less interruption to cash flow.
- Minimise vacancies
Professional photos advertising your property and showing your property three times a week at tenant friendly times (times when employed people can make it to the inspection) will be a good start. Make sure that your property manager is doing the best for your investment.
- Set a rent at 95% of market
This one is a little bit counter intuitive but it means you will have much better enquiry numbers and therefore a larger range of tenants to choose from.
It lets you pick the best qualified, and they will more than likely stay longer.
If you have only one application, did you pick the tenant or did the tenant pick you?
- Include garden maintenance
This can really solve two problems.
The potential neglect of the outdoors of your property (remember: street appeal counts) and a higher market rent with a tax deductible expense.
- Consider furry friends
Pet-friendly accommodation can really set your listing apart, because these tenants tend to get discriminated against and are willing to pay 10-15% more to keep their four-legged family member.
56% of Australians have pets and 25% are considering getting one in the future – do you really want to exclude that many potential applicants?
- Mod cons
Tenants love them and they can really add value so try and get as many of these in your property.
Things like a dishwasher, air conditioning, built in robes, remote garage access, plenty of storage, security features, outdoor entertaining area like balconies or courtyards, fully fenced properties, two separate living spaces (adults and children’s) and off street parking. Modern living is the way to go so keep on track with your property.
- A good tenant
Rental properties can be like rental cars in the fact they get driven hard.
A good tenant is worth their weight in gold so keep them, appreciate them and consider rewarding them.
It really is half the battle.
- Proactive property management
A proactive manager notices a water leak in the bathroom vanity and gets it fixed.
A reactive property manager notices the vanity is water damaged and the door no longer closes and a replacement vanity is ordered.
The difference of being ahead of the curve or behind is huge.
- Some don’ts…
- Furnish – very niche, very transient tenants = more vacancy and more maintenance
- Short term lets – more vacancy, more costs
- Rental guarantees – the cost is priced in and you pay for it
- Price the rent for what you need to pay mortgage – the market decides the appropriate rental – not you
- Get involved – keep at arm’s length – use a professional property manager at all times
- Self-manage- it’s harder than you think! Good property managers make you money
- Let your leases expire at quiet times of the year like around Xmas time
- Be the smartest person in the room – take feedback and advice from your trusted team of advisers