According to recent reports, there are an estimated 45,000 new apartments and units being built in Brisbane for completion by mid-2018. We asked David & Kathy Laverty 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
We know you’ve always been told not to do this, but we’re making an exception. Technology is online advertising is more important now than ever before 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 by its online appearance. 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
Make sure you understand the current market rental rates. With Brisbane experiencing an increasing supply of property, it’s important that you really understand your competition. It’s not as simple as charging the rent you always charged or increasing the rent $5 every 6 months. The rental market, like any market, moves continuously and prospective tenants are very well informed of other nearby offerings.
Step 3: Timing is everything
Advertising the property too early can be a bad thing. Generally people think there’s something wrong with a property if it’s on the market for too long. Because tenants have to give two weeks notice to their previous landlord, they are often looking to move into something in the next two weeks. So if you advertise 4-6 weeks before yours is vacant, you run the risk of narrowing your tenant pool. You don’t want your property to become stale, so it’s a good idea to wait until just a few weeks before your upcoming vacancy.
Step 4: Greed isn’t good when it comes to rentals
You need to understanding the benefit of re-letting. If you have a good tenant that 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 where 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. A bond can be eroded 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 maxmise 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 capitalisaton 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. They then also minimise the risk of losing their bond at the back from having the property in ordinary shape. You can always negotiate on the rates and 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, doing these small things can make a big difference. After holding your property for a few years, these tips could help pay down your loans or purchase your next investment property.
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 airconditioning
David & Kathy Laverty are the Directors of Red & Co Rentals (formally Red Brothers Real Estate), a family run Property Management businesses that focuses on attention to detail and old fashioned family values. If you would like to speak with David or Kathy about your rental property you can contact David on 0437 055 962 or Kathy on 0412 729 935.