Use a Good Property Manager – To ensure your asset is managed properly, you need to make sure you find a good property manager. Good property managers are very hard to find but they should be licensed, come recommended from other investors, have been in the industry for a number of years, have local knowledge of the area and the types of tenants your property is likely to attract and stay in touch with you on a regular basis.
Increase the Rent – This seems like an obvious choice but it is amazing the number of landlords who have not increased their rent for years. Find out what the market rent is and the next time you are able to increase your rent, do it.
Decrease the rent – This seems contradictory to the point above but if your advertised rent is too high and your property is vacant for a month, consider the rent you have missed out on. The best rent to ask for is market rent. However, you may consider asking for a little below market rent, if you wish to find a tenant quickly. You can always increase the rent upon renewal of the lease.
Claim all tax deductions – Contact a quantity surveyor and ask for a depreciation schedule. This will list all the items in and on the property that can be depreciated which in turn can result in a larger tax refund. Most quantity surveyors will not conduct and charge you for a schedule if their professional fee is more than the tax benefit you are entitled to.
Update the property – A new coat of paint, new floor coverings and resurfacing of the bathroom should increase rent by 10%. If you decide to put in a new kitchen, this alone should increase the rent by a further 10%. Updating rental properties not only increases your rental yield but it also helps to attract a better quality tenant.
Allow pets – Many people own pets; tenants are no different. There are relatively few rental properties that are suitable/allow pets. If you can make your property pet friendly, you will often find that tenants will pay you a premium for this.
Charge for utilities – Charge your tenants water usage if your property is separately metered.
The Worst Way to Increase Your Rental Return
Cut back on maintenance – If you can’t increase your income, you could consider cutting back on expenses. Don’t! There are a number of reasons you shouldn’t do this. Firstly, a property that is poorly maintained aggravates the tenant and will create headaches for you (and your property manger). Secondly, a poorly maintained property doesn’t attract good quality tenants. Finally, you don’t want to be contravening any residential tenancies rules or regulations by having sub-standard accommodation.