How To Boost Your Rental Income

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If you are interested in the residential market as an investor one of the fundamental guidelines is to attempt to purchase a property which brings in rent that at least covers the mortgage repayments. Having purchased your investment property, your next aim is to make your property as attractive to tenants as possible. That way the property will rent more quickly, have fewer and shorter vacancy periods and be more popular, meaning that you will be able to select from a greater pool of quality tenants. When this happens, you achieve the highest possible market rent!

Increasing Rent:

When considering increasing the rental income from your property, look at these attractive figures. An extra $10 per week equates to $520 per year, an extra $20 per week equates to $1,040 per year. If you can increase your rent by $20 per week every year for 10 years, then in 10 years’ time you will be receiving an extra $10,400. This extra income can be applied to your mortgage, you could invest in more property or it may be time to give the property a ‘makeover’. Generally investors in the rental property market know and understand that they will need to spend a little regularly, to earn a lot consistently.

Before increasing the rent there are other factors that also need to be considered which include market trends and vacancy rates. A popular myth in real estate in general is that rents never go down. A more accurate statement is ‘What goes up, must come down’! Inevitably, after a boom in property prices or rental income there always comes an adjustment period where the market corrects. This may be months or years after the peak of a boom. In a falling market it is always best to reduce the rent and keep a tenant, than to have a tenant move out for a cheaper property leaving you to incur the reletting costs on top of falling rental income.

Finding The Right Tenant:

Keeping in mind that the rent should be aligned with the current market rate, give the tenant something they want and are willing to pay more rent to have. If your property is managed by a reputable property management agency then they will be able to establish where the rental market is placed. Also ensure your property management agency have vetted the most suitable tenant for your property. As an owner/investor, the property management agency you select to work for you is a key factor in maintaining the integrity of your property, finding and keeping a good tenant and keeping abreast of rental market trends. You wouldn’t want to sell-out of the investment market just because you had a bad experience with a tenant! Right?

Property Attraction:

Potential tenants will be lured to your property through first impressions. If your investment property is attractive from the street then you are half-way there. Believe it or not, “street appeal” is as important to a rental property as it is to a property for sale. If there is a lawn, ensure the lawn is mowed, if there is garden, fresh mulch tidies the look, if there are trees or hedges, trim them or even remove them. This will save you garden maintenance expenses in the long run and prospective tenants will love the convenience of little outdoor work. Freshly painted eaves and gutters will freshen the outside look too!!

Internal Spruce-Up:

As an investor your ultimate aim is to make some money on the property market, but remembering the phrase as mentioned above, ‘spend a little regularly to earn a lot consistently’. Tenants like to call where they live ‘home’. As an owner you can provide this by sprucing up the property. Regular rental increases (market permitting) are part and parcel of renting a property and tenants know to expect this eventually. Tenants also love home conveniences and are often prepared to pay more rent to have certain types of conveniences like air-conditioning. Often the installation of a reverse cycle air-conditioner can result in more rental income per week. Built-in robes in bedrooms, cupboards in the kitchen and laundry can generate a larger return on your investment per month. People like to feel safe in their home, so installing a front security door or fitting a gate to a side access may be a good idea. If your rental property is in a high risk area, you may even consider a cost effective alarm system.

Obvious makeovers or spruce-ups in the kitchen and bathroom such as replacing curled up and tired vinyl flooring with new tiles, or replacing 60’s tiles to a more modern variety, and cupboards with basic white can make the property look clean and fresh. Always look to replace broken or leaking taps and shower heads. These can be quite cheap and simple in style, but will eliminate unnecessary repair expenses down the track. Of course old, dirty, musty carpets harbouring bacteria are a definite no-no, so these should be replaced on a regular basis over the life of the investment.

Property Management:

Employing the services of a managing agent to look after your property and tenants often save you more in the long run than you may think. Sometimes managing the property yourself, can mean spending a great deal of time, work and effort when you really would rather be doing something else. A professional Property Manager can help you with good maintenance regimes, good marketing, assigning registered and reliable trades persons, and of course the knowledge and expertise required to ensure your rental income and your tax deductions are maximized.

We hope that this helps you with your investment options, however should you need a hand we would be delighted to help.

Thanks for your time.

About Gai Kroczek

Gai is the Owner/Manager of Total Care Property Management together with Bernie Kroczek of Bernie Kroczek Real Estate. Gai has been in Real Estate for over 20 years and runs a professional Property Management team utilising the latest technology to assist owners in maximising their investment while also assisting tenants.

Gai is also the web designer and maintains all the office technology keeping abreast of all the many changes and implementing them to make sure our owners get the best possible service.

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