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There are many ways to improve your rental yield on your investment property. Remember, this is about achieving the maximum return in relation to the location, type and demographics of the area where your property is located.
1. First impressions make a big difference
Imagine yourself as a potential tenant for your property. You would not be inclined to put an offer in to rent your property if there were things that were broken and not working properly. Imagine if everything was not neat and tidy, this includes such things as scrappy carpet, peeling paint or shrubs and bushes outside that were overgrown and needed pruning. These small things can make a huge difference to your rental yield.
2. Offer extras
You will achieve a greater rental return if the downtime between tenants is kept to a minimum. At HomeRentals Queensland , we pride ourselves in the processes we have in place between tenants. Typically, the minimum turnaround is usually 2-3 days. However, it is obvious that your property has to be attractive and captivating to tenants to be able to achieve this.
Besides the first impressions, you could offer something that tenants might not be able to get elsewhere to add appeal to your property that is of little cost for you to provide. This could include offering internet or cable TV with no additional charge, or something as simple as free garden maintenance. These ‘free extras’ can always be factored into the rent so you’re not out of pocket.
3. Think Big Things
|Following on from the extras, it makes sense to try to differentiate your property to make it more attractive for the prospective tenant. This of course does depend on the demographics of the area, however by offering such things as air-conditioning or solar electricity, both can have a large influence on the rental price. Remember these big ticketed items will always add equity to your investment.|
These types of improvements can usually be claimed as a tax deduction.
Renovations must be approached with extreme caution. Most renovations will improve the equity of a property, however the immediate return might not be forthcoming. Your property manager is your best asset when looking at this area of expertise as they can usually give an accurate appraisal of the rental return expected after the renovations are completed. Remember the down time when calculating returns from the improvements.
|Some items to consider are an extra bathroom and or toilet. An extra bedroom, updated kitchen or bathrooms as well as extra storage can sometimes do wonders for a property. One of the best ways in Queensland is to improve the functionality and or appearance of the outdoor living areas. If there is none, add an undercover area to achieve this.|
5. Think Long Term
Ideally, you want good tenants who will stick around for the longer term. This helps improve the investment property’s financial performance by saving money by reducing vacancy rates thereby increasing rental yields and helping to reduce repair and maintenance costs because they treat your property as their home and tend to take better care of it.
Go back to the first 4 items and you are not likely to get great tenants unless these are followed. Your property manager cannot find a great tenant if the property is a hovel and not looked after. On the flip side, they will find the best tenants for you by having a company profile that attracts great tenants as well as the profile for being discerning in who they put in your property.