How to improve the long-term rental yields on your property
Achieving excellent rental yields is instrumental in ensuring the long term success of your property investment journey. But how do you make sure your property is looked after by a quality tenant? How do you retain your tenants so you can also derive a consistent income from your property/ies?
Here are our tips to help attract good tenants and keep your property leased and loved:
Make your property appealing to tenants
To get the best rental yields from your property, you must attract a tenant who will look after your property for a long time.
Start by identifying the areas of your new property that you can spruce up to make it rent-ready. You can give your property a fresh coat of paint, clean or even replace the carpets. You could hire a professional cleaner to give the house a thorough spring clean. This will all help make the property become more rentable. Small improvements in the kitchen and bathroom such as replacing taps or a shower screen are also highly cost-effective ways to increase the appeal of your property.
If your property does not come with key appliances such as a dishwasher and air-conditioning, it is good idea to install these. In 2018, tenants expect modern comfort so these items are a must have.
Don’t neglect the outside of the property either, first impressions count! Mow the lawn, pull weeds and invest in some easy care new plants and mulch. A fresh lick of paint outside and cleaning the windows give the property a well-looked after appearance. It will definitely help attract house proud tenants who are looking for a home with street appeal.
Keep reliable tenants
It is costly having to re-market your property or have it sit empty for weeks. If you have a tenant who looks after your property and pays their rent on time, keeping them happy is important to keep your yield consistent long term.
While we do not advocate owners blindly agree with each and every request a tenant might have, we do recommend the owner listen to their property manager’s advice. If the request will help you keep the tenant or the improvement will enhance the property, it may be worth considering if it benefits you in the long run.
For example, sometimes it makes sense to decrease rent in line with the market in order to keep a tenant happy. Get too fixated on a number and your good tenant might pack up and move out.
Always weigh up the cost-benefit equation, and be strategic in your decisions. Don’t let your short term thinking cost you more in the long term by losing a good tenant who made a reasonable request.
Multiple income strategies
Two properties will typically create more income than one. If you can add a second property such as a granny flat to your block that can be a fantastic way to boost your yield in the long term. Be careful however and make sure you work through the balance sheet, as development is costly and you need to ensure the numbers stack up.
Your property manager is your ally
It may seem like a good idea to manage your own property/ies because you will not have any property management costs eating into your rental returns. But you can really turn your property journey into a huge, costly nightmare should things go pear-shaped.
In WA, property management is typically full service, meaning that the property manager will not just collect rent, but actively manage the property for you. They will supervise the tenant’s upkeep of your property by conducting regular inspections. For example, at Momentum Wealth, we hold quarterly inspections and perform follow up inspections if anything needs to be remedied. Your property manager will also be the first point of contact and key relationship holder with the tenant. You can have peace of mind not having to deal with time-consuming, urgent requests yourself. Property managers will organise any repairs as required and agreed to, using their vetted list of contractors. This helps keep costs down and ensures the quality of the work undertaken.
All this will save you considerable time. By staying on top of things and not allowing problems to fester, this approach will also save you money in the long term.
Often the buying process is the most exciting part of the property investing journey, but it will be your property manager’s professionalism that will keep your enthusiasm high in the long run. Choose your property manager wisely. Look for a firm that truly understands property investing as well as their own crucial role in your long term strategy. A property manager should be able to make strategic recommendations in various situations, from rent increases to tenant requests to property improvements. For more information on our property management services please go here.