8 Simple Tips for Better Rental Returns
Whether you’re new to this investment property business or have been playing landlord for a little while now, this is required reading. You’ll learn some straight up simple ways to maximise your profits. It all starts with some careful, strategic forward planning and you’ll stay on track by staying in the know.
One. Take charge.
Even if you have a real estate agency screening your applicants, make sure you take an active role in the leasing process. You should endeavour to work alongside the property manager, rather than simply being dependent on their service. Make sure you have all the necessary info to make smart investments, especially when considering rental income and lease renewal. If you are unsure of something ask the property manager to clarify. You are paying for their expertise so do not be shy!
Two. Start the lease renewal early.
If you’d like to keep your tenants, the lease renewal process should begin at least 3 months before the lease expires to avoid an extended vacancy. Within the 3 months, you’ll be able to establish whether the tenants are interested in staying or not. If they’re wanting to move, you can at least start looking for new tenants a little earlier – you’ll want to start the process at least 3 weeks before the tenant moves out. Planning ahead is key here.
Three. Make a good first impression.
When advertising property, photos are everything. As is the copywriting on your ad. It’s important all the key features of the property and the location are clearly articulated. If you’re listing the property yourself, make sure you get your ad right. It also could be worth paying fees online to boost exposure of the property. Marketing makes a huge difference at this step. Don’t scrimp here, think of it as an investment to maximise return on your investment property.
Four. Think about doing some basic renos.
We’re not talking knocking down walls and installing a new kitchen, but some basic cosmetic updates can really make your property more attractive to prospective tenants. New flooring, blinds and even a lick of paint on the walls can be done without huge expense and can ensure your property doesn’t lie vacant. A reverse cycle A/C unit is an absolute plus in our Aussie climate, so if you don’t have one, get one installed. Ditto with a dishwasher. These little additions go a long way to securing a quality tenant and achieving a better-than-average weekly rental.
Five. Keep an open mind with pets.
You may have thought having tenants with pets is a terrible idea. But in fact, the opposite is often true. Pet owners are likely to stay longer and often are known for taking better care of their properties – they’re caring people – they look after their pet. Many will also be willing to pay a higher weekly rent too. Just make sure your agent includes all the necessary clauses on the lease.
Six. Study the market, then set the price.
Before locking in your weekly rent, observe the other prices in the market and also be aware of the vacancy rates. If vacancy is low and rental demand is high, you might be able to charge more. Just don’t overprice your rental or you may end up being in the vacancy pile. You want to lease quickly and have your investment property delivering the goods pronto.
Seven. Be careful when setting your lease expiration date.
It’s important to know the busy season for moving. Generally speaking, tenants will be more active between November through to February – new year, fresh start attitude. Keeping this in mind, you may occasionally want to offer a 9 month lease as opposed to 6 or 12 – the goal being to have the renewal fall in peak season. This tidbit of advice can be the difference between having a 1 week vacancy compared to 6 weeks – or more.
Eight. Keep an eye on the rental market outlook
Finally, keep an eye on what’s going on in the market. When creating your investment strategy, the market activity should play a significant role in determining exactly what your plan involves – it will help you achieve long-term success. Keep an eye on the news – things like an improving economy can influence migration and in turn demand. Equally, an anticipated surge in new supply may cause rents to soften in future months or years.
Of course, if you’re not in the know, it’s important to surround yourself with trustworthy experts. You don’t want your property to become a hole in your pocket – so if you’re too busy, enlist help. There are plenty of experts just a call away.