No matter how long you have owned your rental property, you could potentially increase your rental return just by making a few small changes.
Blogger: Heidi Armstrong, CEO, State Custodians
1. Regularly review the rent
If you are not regularly reviewing the rental market, you could possibly be charging too much or too little rent without even realising it. It is important that you compare your rental fee with other similar properties on the market on a regular basis. If you find that your rent is below the market average, you may be able to raise the price. Alternatively, if you find that your rent is too high, bringing it down may help decrease your vacancy rate.
2. Refresh the property
Making improvements around the property could help improve its value and as a result, could enable you to raise the rent. Some examples of low-cost DIY improvements include:
• Coat of paint: A fresh coat of paint can add an instant improvement to the property. Stick to neutral colours in order to appeal to a larger group of potential tenants.
• Tidy the garden: This could instantly improve the first impression appeal for your property. However, remember that a low maintenance garden may be more attractive to tenants as they will be able to keep the outside tidy without having to put in a lot of effort.
• Room add-on: Your property could appeal to a larger number of tenants just by adding on an extra room. For example, if you had a two bedroom property and then added on a third, you may find that families with children may show more interest in renting your property.
3. Make the property pet-friendly
This is one income booster that may not require any upfront costs (unless you decide to put in a doggy door etc). As not all landlords offer pet friendly homes, they are in high demand. This means that your vacancy rates may decrease and as you are offering something extra, you may be able to increase your rent.
But remember, if you are worried about pets causing damage, implement provisions that the tenant must agree to. For example, the tenant must pay a higher bond to cover and damage fees or they are required to have the carpets cleaned regularly.
4. Review your home loan
Boosting your rental income could be as simple as refinancing your home loan. No matter how long you have had your home loan for, it is important to regularly compare it to other products on the market.
Lenders are constantly coming up with new and improved home loan products which could end up saving you thousands over the rest of your loan term.
5. Review your property management
Whether you are a DIY landlord or engage a property manager, you should review the management process and outcomes regularly.
There are several questions you should ask yourself about your property manager’s performance. Do they fulfil their responsibilities? Do they keep in regular contact with you? Are you tenants happy with the way your property manager handles requests and concerns? Also take a look at the performance of the property. If there has been a significant amount of vacancy periods or the property has not been maintained, it could be a sign that the property manager is not doing their job.
About Heidi Armstrong
Heidi Armstrong is the CEO for State Custodians Mortgage Company. Since founding the Company in 2006, State Custodians has grown to become one of Australia’s most respected non-bank lenders. Heidi holds a Law Degree, a Bachelor of Science and a Diploma of Finance and Mortgage Broking Management. An expert in personal finance, securitised lending and the mortgage industry, Heidi is passionate about sharing her invaluable knowledge to educate borrowers.
Widely recognised and respected by industry peers, Heidi was a finalist in the 2012 Australian Lending Awards for the Best Thought Leader. Moreover her Company, State Custodians, has received numerous awards, including Money Magazine’s 2013 Non-Bank Lender of the Year, a ‘5 Star’ CANSTAR rating on four of its main loans for six years running and the prestigious award for Best Overall Customer Service at the 2013 Australian Home Loan Awards (beating all of the major banks, credit unions and other lenders and mortgage providers for superior customer service).