According to recent reports, there is estimated to be about 30,000 new apartments and units being built in Brisbane for completion in 2016-2017, so we asked David & Kathy Laverty from Red & Co’s rental management team for their top 6 tips to make your rental property SIZZLE – and make sure you maximise your rental income today and going into the future!
Step 1: You can judge a book by its cover
This is as simple as presenting the property in the best light. The most important form of advertising is online and therefore it’s important to invest in professional photography. A large number of prospective tenants are time poor and make their decision about a rental from the way it looks online. A simple one-off investment of around $180 gives you fantastic photos of your property for life.
Step 2: You need to know the market
Understanding the current market rental rate is critical. With Brisbane becoming increasingly supplied with property, it’s important that you have a detailed understanding of what your competition is at the point in time you are renting. It’s not as simple as getting the rent you always charged or increasing the rent $5 every 6 months. The rental market moves continuously and prospective tenants are very well informed of other offerings in the vicinity.
Step 3: Timing is everything
Don’t advertise the property too early. Rentals are quite similar to sales whereby if they stay on the market too long there is the perception that something must be wrong with them. The average tenant is looking to move into something in the next two weeks as it is usually when they have given notice to their prior landlord. So if you advertise 4-6 weeks before yours is vacant again you run the risk that your pool of available tenants is small and your property will become stale.
Step 4: Greed isn’t good when it comes to rentals
You should understand the benefit of re-letting. If you have a good tenant who has been paying rent and looking after the place, they are likely to be better than anyone new you can get in. It may be worth not pushing rental increases too hard as there are costs associated with new tenancies like let fees, advertising and potential vacancy.
Step 5: Know when to move on
Not moving a tenant on can cripple your rental returns. Tenants’ situations can change, for example if they lose their job or have other issues whereby they stop paying rent. It is important to act swiftly to understand the likelihood of any further rent being paid. The four weeks bond can be eroded very quickly through cleaning and maintenance even before rental arrears are taken into account.
If a tenant cannot afford your rent anymore it is in everybody’s interest to change that situation immediately. The tenant can easily find a more affordable property elsewhere and you can get a new person in who can afford your place.
Step 6: Maximise returns and add revenue streams
Have you looked for opportunities to add services to your existing rental property to maximise your yield and ultimate return? In multi-tenant properties, you could add services like coin-operated washing machines and vending machines, which will not only add revenue to your back pocket but also add to the properties value by increasing the capitalisation rate.
In a standard residential property, you could offer extra services for the tenants like house cleaning and gardening services to the tenants when they sign the lease. They might be happy to pay a little bit extra to avoid the responsibility and avoid risk losing their bond at the back from having the property in ordinary shape. You can always negotiate the rates and then contract independent gardeners or cleaners to do the actual service – for example, if the cleaner charges you $80 per month, you could charge the tenant $100 per month for the services increasing your annual revenue overall.
Overall, doing these small things can make a big difference after holding your property for a few years and could help pay down your loans or purchase your next investment property quicker.
We also asked David & Kathy what their favourite 5 methods were for improving rental property returns, they are –
- Washing walls and repainting them
- Removing any rubbish from the property and giving the garden a clean up
- Putting up new blinds and curtains
- Install new door handles
- Installing air conditioning
If you would like advice on your rental property or to change property managers, get in touch with one of our experienced staff on 1300 88 73 28 or use our contact page to send us an email.