Many investment property owners choose to self-manage their investment properties to avoid having to pay the management fees charged by real estate agents. In addition, many property owners feel that, as real estate owners often manage a large portfolio of properties, they may not be able to give their property priority, particularly when it comes to finding new tenants and conducting property condition inspections.
Fortunately, the flexibility afforded by self-management can give savvy property owners plenty of opportunities to capitalise on their investment property. Below are some simple tips for increasing your rental yield.
If you've invested wisely, then your property will be in an area of high rental demand. This means that tenants will be willing to pay a premium to live in your property, and you should be able to charge accordingly. Note that auction rates do not necessarily reflect the rental demand in a given area, as some very sought-after areas have low auction turnover but are popular among renters. Don't be complacent about your rental rates: be sure to increase them in line with the market standard whenever your leasing arrangements allow for this.
Tenants are often happy to pay a premium to be located close to essential amenities such as public transport, schools and parks, as well as shopping and dining opportunities. When pitching your property to potential tenants it's essential that you highlight these factors. Other ways of offering value for money include keeping on top of maintenance and upgrades. For example, a simple coat of paint or the addition of fixtures such as down lights or bathroom fans and heating lights can improve the perceived value of your property, allowing you to increase your rental yield.
Tenant turnover can be costly, as the gap between one group of tenants moving out and the next group moving in represents lost income. In order to increase the likelihood that your tenants will look for an opportunity to move on, you may wish to consider options for increasing the appeal of your property. Allowing pets, for example, not only allows you to charge a premium rate, but is a good way of keeping your tenants in your property in the longer-term, particularly given that very few other property owners will allow the same. Incorporating gardening fees and even a fixed-rate utility fee, such as for water, into the rent can be a good incentive for your tenants to re-sign. If your tenants are happy with their rental situation, they'll be far more likely to remain in the property, even if you choose to increase the rent with each new lease agreement.
As a self-managing landlord, it's your prerogative to ensure that the rental agreement is working well. This means undertaking regular property checks to ensure that your property remains in good condition, and closely monitoring the payment status of your tenants. You should also keep an eye on any requests for maintenance to see whether any particular issues are cropping up more often than expected. This may indicate poor treatment on behalf of the tenants, or poor infrastructure or fittings that should be addressed sooner rather than later. Keeping on top of these factors can save you from costly losses or replacements and further improve your return.