rental return of your investment properties is easy with these 10 industry
1.Refresh the Property
Whether it’s a coat of paint, fresh curtains or updating the light
fixtures there are many inexpensive ways to refresh a rental property without
blowing your budget. Furthermore if considering bigger renovations such as
carpet or flooring opt for an option such as interlocking carpet squares so
that you can save money in the future by swapping single damaged or worn tiles
out for spares.
Cosmetic touches will lift both rent and equity and are best timed to
coincide with your property being advertised so that it looks fresh for
prospective tenants, you get a pristine entry condition report and you can
adjust the rent accordingly. Don’t forget to keep all of your receipts to claim
2. Include Garden and
Pool Maintenance in the Rent
By including garden and pool care in the rent you are ensuring that both
are maintained to a high standard and reducing the likelihood that small
maintenance issues will become bigger issues. Tenants are busy people too and
most find that having these tasks outsourced is not only convenient but also
attractive in a rental property. As a bonus you can claim the costs back as a
3. Consider Pets
There are many
great tenants out there who struggle to find pet friendly accommodation or are
unsure whether to come to your open home because its not specified. Generally
these tenants are willing to pay 10-15% more to keep their four legged family
member and will stay longer in their leases for fear of not being able to find
56% of Australians
have pets and 25% are considering getting one in the future – do you really
want to exclude that many people? Don’t forget to specify on your advertising if
you’re willing to consider pets as it will definitely generate more interest in
Spend the money to
get professional photos of your property done when it is vacant and you should
be able to get at least a few uses out of the same set. Advertising your
property in its best possible light on one of the dominant property portals
will attract more prospective tenants to the open home, upgrading to a feature
ad is also a proven way to attract more attention and is best done at the
beginning when your property first goes online.
It is also
important to schedule open home times at different hours of the day so not to
exclude workers. Good times to schedule inspections are at 3:30pm to catch the
tenants picking up school children, 5:45pm to get the office and retail workers
and 10am to get the shift workers.
5. Set The
Rent At 95% Market Value
It sounds counter intuitive but it means you
will have much better enquiry and therefore a larger range of tenants to choose
from. If your property demonstrates value compared to the other listed
properties you will be able to choose a tenant that has better references and
is likely to stay longer.
If you have only one application did
you pick the tenant or did the tenant pick you?
6. Longer leases
Its important to
trial all first time tenants on a 6 month lease to ensure that you are happy
with how they are maintain the property and there are no problems. However if
everything is fine after 6 months you should be offering them a 12-month lease
renewal, this will eliminate the costs of multiple letting fees and advertising
costs and vacancies throughout the year.
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 are all very attractive to prospective tenants and if
you can include them they will increase your rental return. It is a good idea
to give new tenants a copy of manuals for appliances to reduce them being
misused and increase their working life.
8. A Good Tenant
If you have a good
tenant in your property then half the battle is already won, simple things like
replying promptly to maintenance requests and not increasing the rent too often
will keep them happy and in the property for longer. It is important to have
incremental rent increases but it is always better for your cash flow to have a
steady, respectful long-term tenant than a revolving door of 6-month leases.
9. Be Proactive at Routine
Be proactive whenever
you are at the property, look for signs of dampness or mould that could
indicate a water leak, wobbly railings on the deck or loose floorboards must be
inspected immediately, cracked tiles and incorrect drainage are all issues that
become massive headaches if they are not dealt with promptly. Don’t forget a
stitch in time saves nine.
Have a clear
procedural path for your tenants to submit maintenance requests and ask that
they keep an eye out in the periods between routine inspections.
10. Do’s and Don’ts
·Furnish your property– this is a very
niche market which attracts transient tenants more vacancy and more maintenance;
·Short term lease’s – more vacancy,
·Rental guaranteed properties– the cost is
priced in and you pay for it;
·Pricing the rent to what you need to pay your
mortgage– the market decides the appropriate rental – not you;
·Don’t let yourleases
expire at quiet times of the yearlike around Christmas time.
·Self-manage your properties to save agency
fees. A good place to start is using an automated property management tool like
realrenta.com which can manage a whole property portfolio online with features
such as logging communications, generating rental ledgers and maintenance
requests, automating entry notices and rent payment reminders. Your time is
money so it makes sense to use a communication platform to make things easier.
Also this option will save you a lot of money on traditional property
management fees allowing you to maximise your rental return.
Thursday, 21 January 2016