Australia has over 2.2 million individual property investors and investing in property has been a proven way for Australians to build wealth. While it is important to do research and acquire the right investment property, it is equally important to ensure getting the best yield for your investment.
We have covered 7 simple tips that will allow you to improve rental returns on your investment property.
1. Long-term lease option
With falling home ownership rates and affordability crisis more people are renting than ever for longer terms, while they are saving up to buy their own home. However, many would want to avoid the hassle of regularly moving out and finding a new place to rent. Moving home frequently can be an expensive and time-consuming process. Long-term lease option can bring more security to the renter and can also be a reason for achieving higher rents.
It is also good for the rental provider in many cases, as it can save them the vacancy between tenancies and additional costs of leasing and marketing expense to find new renters.
2. Making property Pet-friendly
There are more than 29 million pets in Australia – higher than the human population of over 25.87 million. Three in five Australian households have a pet. This is a clear reason why a pet-friendly property will attract more renters and some of them may be willing to pay higher rent to bring home their furry kids with them.
While allowing pets in property is a really good way to attract renters but it is equally important to pet proof your investment property with right Landlords Insurance Policy and pet clauses in the lease agreement to protect you against the cost arising out of any damages caused by the pets.
Victorian rental laws have recently changed, and only way for an owner to refuse a pet is by getting an approval from the VCAT.
3. Smart & Modern Improvements
With more people working from home and spending more time at home, there are various additions you can do that can help you to improve the rental returns.
Having the property NBN ready with faster internet access
Heating and cooling systems in bedrooms as many of the bedrooms are now used as home offices
Adding study nook, if possible and if the layout allows
Additional storage in the redundant spaces
LED lightings, smart plugs, smart bulbs, google home assistant, power point sockets with USB ports
Letter boxes with parcel compartment (over 80% of Australians prefer to shop online)
4. Identifying the sought-after property trends in the neighbourhood
There are additional improvements you can do depending on where your property is located and what the renters are looking for in the area, which is not much in supply, and that is almost a guaranteed way to achieve higher rents. For example:
Providing white goods such as refrigerator, washing machine, dryers
Fully furnishing the place if it is close to universities
Providing executive furnishings if the property is close to big corporations and employment hubs
Many international students and corporate professionals working on projects for mid to short term prefer not to buy own furniture and are willing to pay higher rents, in some cases up to $100 per week for a one-bedroom apartment.
5. Refresh the property and maintain it to high standards
Well maintained properties have a much better chance of attracting higher rents and better-quality renters. It is difficult to get higher rent for a property which is not kept up to date, is unclean or has broken fixtures and fittings.
Few simple upkeeps that can go a long way:
Detailed professional cleaning for kitchen and bathrooms
Steam cleaning the carpets regularly or replacing them if need be
Fresh coat of paints is an instantaneous way to increase the likeability and liveability of space. Best to keep it to light and neutral colours to make it look and feel bright and spacious.
Up to date window furnishings are important. Depending on the space and type of the property – block out blinds, sheer blinds or curtains can add value to the charm of the property.
Majority of the upkeep expenses will not break your bank account and can be tax deductible while increasing the potential for higher rent.
6. Full Renovations
Although the property needs to be maintained regularly, with time properties do age and need a complete renovation. Some of the key areas for renovation can be:
Full bathroom and toilets
Kitchen and kitchen appliances
Laundry
Potentially adding a study room or in-built wardrobes
Flooring
Landscaping and rejuvenating the front yard / backyard and making it low maintenance
While this can be more expensive than the smart and modern improvements, many of the costs will be tax-deductible and will help increase the rental returns. The rental market is continuously evolving, and the rental demand keeps changing with time, so as an investor you also need to keep up with the market demands.
7. Professional Photography and Leasing Campaign
While your property could be in excellent condition and well maintained with all bells and whistles, a weak marketing ad with poor quality photos would not encourage potential renters to come and inspect your property. We are living in a digital era and professional photos can create a better presence of the property and attract more renters to inspect the property. The better exposure, the higher chance in achieving higher rent and better renter.
The other important element is the layout or the floor plan of your property. We often see this being provided in sales advertisements but not so much when it comes to leasing campaigns. However, it can really add value, especially if your property has a great layout.
TEAM SONI CAN HELP
While the tips are simple and it can really add value to your cashflow, trying to figure it out all on your own can be overwhelming. Seeking professional help from an experienced property manager can go a long way.
At SONI Wealth, we have an expert Property Management Team who thoroughly understands the ins and outs of managing your investment. Also, most of them are investors themselves and understand why having a better yield on your investment is the key to long term gains.
If you would like to find out more or speak to one of our Team members, book your no-obligation consultation now. We would love to help you make the decision with confidence.