A simple yet structured process, as well as planning, could ultimately allow investors to maximise returns from their rental properties.
Here are eight tips that landlords, and their property managers, can use to obtain greater returns:
1. Steer the ship
We encourage investors to take an active role in the leasing process, working with their property managers rather than simply relying on their services. Make sure you have all the information you need to be able to make informed decisions about your investment, especially in terms of comparable rental incomes and lease renewals.
2. Start lease renewal early
The lease renewal process should begin around three months before the lease expires to avoid long-term vacancies. During these months, you must be able to determine whether the tenant will stay or leave. Ultimately the documents should be completed at least one month before the expiration of the lease. If the tenant intends to move out, we recommend starting the rental advertising campaign three weeks before the end of the existing lease.
3. Make a good first impression
When advertising the property, high-quality photos are essential. In the same way, a good advertising description is essential, highlighting the characteristics of the property. In some cases, to increase online exposure, it is definitely worth paying additional advertising fees.
4. Consider basic renovations
Although major projects are generally not necessary, basic cosmetic renovations, such as freshly painted walls, carpets, curtains, and polished floors, can improve a property's profitability. In some cases, a cost-effective kitchen revamp and installation of new energy-efficient heating and cooling can also help maximise returns.
5. Keep an open mind
Once the tenant applications start coming in, it is best for you to keep an open mind, for example, regarding pets. According to many experts, the willingness to accept pets generally leads to higher weekly rents or lower tenant turnover (sometimes both). In this case, the property manager's responsibility is to make sure the appropriate pet clauses are included.
6. Study the market before setting a rental figure.
Before deciding how much rent to charge, we encourage landlords to understand the current rental market, including vacancy rates and rental prices in the area for comparable properties. Here, the local knowledge of the property manager will definitely come in handy.
7. Be careful when setting the lease expiration date.
When setting the next lease expiration date, consider the traditional busy and quiet seasons. In general, tenants are most active between October and the end of February. Occasionally it may be beneficial to provide a 9-month lease instead of the usual 6 or 12 months. The reason for this is to do the next lease renewal during the peak season.
8. Focus on the prospects of the rental market
Finally, to formulate a smart investment strategy, we advise investors to consider the future outlook of the rental market, which will ultimately affect the long-term success of your investment. Expectations of improving economic conditions often have a positive impact on immigration patterns and vice versa. In the same way, the expected increase in new supply may lead to rents weakening in the coming months or years. Ultimately, being surrounded by competent and trustworthy real estate professionals will help understand the market and develop strategic investment methods.
Luke Jorgensen - Lush Property
Tags - Property Investment; Property Development; Renovation; Valuation; Valuer; First Home Buyer; Buyers Agent; Buyers Advocacy