Owning an investment property is one of the best ways to build wealth—but self-managing your rental could be costing you more than you realise.
As the school year approaches, it’s the perfect time to get your home organised and ready for a smooth transition back to routine.
As the new year approaches, it’s the perfect time for renter providers to reassess their strategies and set their properties up for success in 2025. Whether you’re looking to increase rental income, attract long-term renters, or simply maintain the value of your investment, here are some actionable tips to help you maximise your rental returns.
The festive season is upon us, bringing joy, celebrations, and the perfect opportunity to make your property shine. Whether you’re a renter provider preparing for a new year or a tenant hosting holiday guests, here are some practical tips to get your property Christmas-ready and spread holiday cheer.
As we approach the warmer months, now is the perfect time to start preparing your home for the summer of 2024 and 2025. Whether you’re a homeowner or rental providers looking to keep your property in top condition, these tips will help ensure your property is summer-ready for you or your renters.
Doing your research on the area in which you’re planning to invest is paramount to maximising your rental return.
Some of the questions you might ask include:
1. What type of property has the highest rental demand in the market
2. Which properties see the lowest turnover of renters
3. Which times of year see the highest inquiry rates
4. What is the demographic of the majority of renter inquiries
5. What are the key property attributes people are looking for
It’s important to know this information when either investing or considering renovations so you can make better decisions as to where you invest your money and when.
For example, 2 bedroom units might have the highest demand and lease the quickest, however they might also have the highest turnover of renters, which in turn creates more vacancies and potentially wear & tear on your property.
If you’re planning to purchase a property or do a renovation, have a chat with our property manager, who can give you the best tips on what features local renters value most, the best yielding properties, average tenancy tenures and the best time to bring your property to market.
Is paying off your home or investment loan quickly a high priority for you? It seems there are new loans and investment strategies birthed daily. Although this may be an exaggeration, it does make sense to be educated in this regard.
By restructuring how you use your current bank account/s, credit card/s and home loan/s, you could possibly save yourself thousands of dollars, while reducing the term of your loan at the same time. Choosing to pay your mortgage payments weekly or fortnightly as opposed to monthly could have a dramatic impact on your loan. When was the last time you spoke with your bank manager, accountant or financial advisor? Staying in touch with them regularly to discuss your options could help save you time and money off your loan.
You may be looking to expand your property portfolio. It may be a surprise for you to learn that you have equity in your current home and/or investment property that can be used as leverage to purchase another investment property and increase your property portfolio? If this is the case, you may not be required to pay any out-of-pocket costs to purchase another should the equity amount be sufficient enough. When was the last time you had an appraisal on your property? You may be excited to learn that the value has increased.
Please get advice from your accountant/financial adviser before moving forward.
Despite our zero tolerance arrears policy and encouragement of our Renters to set up direct debits, unfortunately some Renters will not pay on time. In the event, our renter’s rent payment falls into arrears we take immediate action. We will call the renter to ascertain the cause of the rent arrears and do all we can to recover the overdue amount.
Our arrears action plan includes daily telephone calls, regular sms and email reminders and formal letters when required. Should payment not be forthcoming, a termination notice is served to the Renter after 15 days. If it gets to this point, we will contact the Landlord to gain their consent to serve the notice and seek recovery of the monies and or vacant possession.
If we need to contact the Landlord in such instances it is often natural for a Landlord to want to give the renter a second or third chance to pay. Whilst this is noble and we all know that some renters do have genuine hardship, swift action is needed to put the renter on notice and to protect your legal rights. We ask our investor clients to swallow a bitter pill and view the rent arrears action as a business decision that needs to be made and to instruct us to serve a notice of termination upon the renter. This notice formally advises the renter that if rent is not paid then we will have no alternative but to take action to end their tenancy and recover all monies due.
This is not a palatable decision to make, however prompt payment of rent is the life-blood of our Landlord’s investment. We will work closely with our Landlords to protect their interests and maintain our zero tolerance policy to rent arrears.
Unfortunately as Landlords we don’t get to choose the market conditions in which our property becomes vacant. Even long-term tenants move on at some stage. Maybe you have been unfortunate with a string of short-term tenancies. Vacant rental properties affect your overall annual income. For every week that your property is vacant your annual return is affected.
Everyone wants to get the best return they can for their investment. The loss incurred by hanging on for an extra five or ten dollar increase per week may reduce your annual income by more than 2%. For example, you may have a prospective tenant who offers you $360.00 per week, but the vacating tenant was paying $375.00 per week. Declining that applicant and having your property vacant for an extra 3 weeks means you are losing out on not just $15.00 over 3 weeks, but $1080.00 annually. That’s a significant loss!
It is therefore important that you know your current market and let it guide you in your decision. How much are other properties in the area achieving now? How long are they staying on the market before being let? Pricing your property slightly lower than those available, may mean a shorter vacancy period in a tough market.
You may have been fortunate in the past and received higher than average returns. Your property is only worth as much as someone is willing to pay. The market is not your only variable but the circumstances of the applicant themselves. A business couple transferring from a larger city for example may be willing to pay more than average rent, as it is much lower than what they are used to paying. However, a middle-class family moving from within the area may not have the financial capacity to pay more.
Have your property appraised by an experienced property manager who works and knows the market. But most importantly, don’t price yourself out of the market!
Most of us have a household budget, but have you created a budget or financial plan for your investment property?
It is important to take into account that appliances and fixtures will need to be repaired or replaced over time; that rates and body corporate levies will increase and that your property may not be occupied 100% of the time.
These costs should be factored into a financial plan and a set amount each month should be set aside in a sinking fund bank account to cover such contingencies. Failure to have a financial plan or budget for your investment property can have an impact upon your lifestyle or household budget should such an expense occur, finding you with insufficient financial resources at the time to meet the commitment.
We often see renter provider clients facing a shortfall when having to fund unexpected repairs. This, in turn upsets the renter and can even lead to them vacating or making a claim for compensation. All of these things are upsetting for all concerned and could be avoided if an investment property sinking fund was in place.
We suggest that you take the time to create your budget. We can assist in providing you with cost estimates to help you with the creation of your sinking fund.