Investment properties are an excellent way to help you achieve financial security and freedom and tend to be less volatile and more profitable than other investments. As an investor, it is beneficial to seek ways that will help you achieve maximum return on your investment and thus optimise your property investment journey.
Review your rent
Ensure that your rent is well-priced and reflective of current market conditions. If after researching the market you find that you are charging rent that is below market value, then it is in your best interest to raise it however before doing so, be sure to consult with your property manager. Don’t be fearful that this will lower your chances of securing tenants, if you’re charging rent that is in line with similar properties in similar areas, you have nothing to worry about. How often you’re permitted to raise your rent is subjective to the type of lease and where in Australia you live, however in Victoria rent can only be raised once every 12 months. Be sure to provide your tenant with adequate notice before raising the rent (at least 60 days’ notice).
Revamp the property
Tenants will be more likely to pay higher rent for a home that is modernised and in good condition. You can either give your property a facelift e.g. new blinds, a fresh coat of paint, new fixture, a low maintenance landscaped garden etc. or you can go the extra mile and invest in a more costly renovation e.g. re-doing important rooms such as the kitchen or bathroom - either way, it will increase your investment property’s value and as a result, maximise your rental return.
According to the RSPCA, 61% of Australian households have a pet and as a result, pet-friendly properties are in high demand. Taking that into consideration, it is beneficial to permit pets and as a result, broaden your pool of prospective tenants. Understandably, pets can be a financial risk to investors however to protect yourself against this, it is wise to include a clause in the rental contract that safeguards you against financial liability as a result of pet-related damage. Be aware, the tenant’s bond may not completely cover all expenses, so it is best to review your landlord insurance before going forth with the clause.
Offer flexible lease options
Long-term leases offer stability and security therefore tenants may be more inclined to pay higher rent. This is likely to favour families in particular who prefer to feel more settled and not be at risk of having to move in a year or two.
Short-term leases are ideal in a high demand area and allows landlords to charge higher rent in peak season.
Locate a good property manager
Rather than manage your own investment property, it is wise to find a good property manager who will provide you with advice and recommendations to help minimise extended vacancy and maximise your property’s rental return. While there are many ways to help secure higher rent, it is ultimately dependant on the state of the market therefore it is best to consult with your property manager.