Your investment property is your most important asset, with the potential for significant rental returns.
But when it comes to maximising returns, where do you start? Follow our guide to get the most from your investment property at every stage.
Step 1: Get a robust landlord insurance policy
By taking out a quality landlord insurance policy at your earliest opportunity, you’ll be covered for any issues resulting from tenancies, such as theft, damage or rent default. The right policy for you will depend on your circumstances, the type of property, and whether it’s furnished, so it pays to carefully research your options before making a decision. Did you know that you can get cover for pet damage?
Step 2: Find a good tax depreciation specialist
Many landlords don’t understand all of the available tax deductions on their investment property, meaning they’re missing out on deductions that could improve their overall returns. Your property manager can help find the right specialist for your needs.
Step 3: Make sure your property is compliant with QLD regulations
There are a number of regulations that govern landlord obligations in Queensland, relating to safety across areas like pool fencing, security and smoke alarms. If you don’t abide by the regulations, you could receive substantial fines or undergo disciplinary proceedings.
Step 4: Familiarise yourself with the local market
You would have investigated the local sales market while buying your property, but renting it to tenants often requires a different set of knowledge. For example, do you know the current local vacancy rates? Have prices increased significantly in recent years? What attracts renters to the area? Who is a typical renter in your area? How long does it take to find a tenant? And what will they pay more for? Why did your last tenants leave? The more information you have, the better equipped you will be to make good decisions that lead to better returns from your investment.
Step 5: Make improvements so your investment is at its best
Minor improvements can make a big difference to the price your property will achieve in the market, as well as to the level of tenant interest. A coat of paint and new blinds can instantly make a property feel fresher, while simple additions like air conditioning units or dishwashers can really pique the interest of prospective tenants and set your property ahead of others. An experienced property manager can let you know which improvements may increase the rent on your investment.
Step 6: Listen to the market
Once you understand the market and you’re confident the property is looking its best, you’ll be able to decide on a fair weekly rent in conjunction with your property manager. This often requires a balance to be struck between delivering high returns to you as the investor and offering a competitive price in the market for your tenants – too low and your return is affected, too high and your tenants will find a more affordable property, opening you up to vacancies that could cost more than you would have made from a higher rent. Your property manager can advise you on an appropriate amount that considers all aspects of your return.
Step 7: Invest in marketing and advertising your rental property
Landlords can be tempted to strike off marketing and advertising expenses or at the very least reduce them to the bare minimum. But this approach fails to realise the true impact that marketing has on finding and keeping excellent tenants. High-quality professional photos, good styling, well-written and enticing descriptions, and a relevant marketing strategy for your target market will help you attract quality tenants and a higher rent. This results in lower vacancy rates, reduced risk of damage from bad tenants, higher cash flow and lower tenant turnover – all factors that contribute to your investment’s bottom line.
Step 8: Choose your tenant carefully
Selecting a tenant from the applications received shouldn’t be taken lightly, as a reliable tenant is essential to ongoing strong rental returns for you as an investor. Your property manager should conduct thorough reference checks, review the tenants’ income and rental history, and ensure the property is well-matched to their lifestyle to reduce turnover and the likelihood of unpaid rent.
Step 9: Conduct regular inspections
Routine inspections are essential in making sure your property is in good condition, without damage or maintenance issues that could affect its value in the long run. At Aurora Realty, we look out for any signs that the property isn’t being well cared for, as well as any potential future problems resulting from general wear and tear. Inspections are also an opportunity to check in with the tenant on any concerns, so we can quickly resolve the issue and keep communication open. In addition to checking for damage in inspections, it’s important for you or your property manager to develop a strong rapport with your tenants so they feel comfortable reporting issues without fear of rent increases or eviction.
Step 10: Be proactive with maintenance and repairs
A clever landlord shouldn’t wait until a problem arises to address it. By proactively identifying maintenance issues, it’s possible to fix a minor problem before it develops into major damage, saving on expensive repair costs and the cost of unhappy tenants. If Ensure you also select experienced property management professionals who have a proactive approach.
Step 11: Make sure rental payments are up-to-date
Despite carefully choosing your tenant, you may still face situations where your tenant fails to pay or stay up-to-date with rent. At Aurora Realty, we stay on the front foot by using a payment system that manages this on your behalf, ensuring that tenants are up-to-date with payments at all times.
Step 12: Carefully consider rent increases
Rent increases are obviously important in maximising your rental return. But remaining competitive in the wider market is also crucial to maximising your rental return. Raising the rent too often or by too much can cause problems with tenants, or even constitute a breach of regulations. Your property manager can advise on when is appropriate to increase the rent and by how much.
Step 13: Proactively manage the end of the lease
It’s not uncommon for tenancies to reach their end without anyone contacting the tenant to find out their plans. While your tenant might decide to stay on, it’s by no means a certainty once they have fulfilled the terms of their lease. What’s more, you may miss an opportunity to discuss another 12-month lease instead of automatically entering a less stable month-to-month agreement that could end at any time.
Your property manager can take care of this on your behalf, by formulating options for your tenant and confirming their preferred approach well in advance, reducing uncertainty on all sides and leading into another successful tenancy period.
Maximise your rental returns now, with the help of our professional property management team at Aurora Realty.
There’s never been a more important time to engage the professionals. Get in touch with us today.