INCREASE YOUR RENTAL RETURNS

by Administrator 30. December 2014 00:55

As a property investor now is the time to think about making the ultimate new years resolution, and that is to increase your rental returns.

Take the time to review the past rental year.  Did you have a vacancy and if so how long was the property vacant and did you get a rent increase and secure a long term tenant.

Resolution number one: When does your current lease expire? Does it expire during a low demand season? Your property manager can inform you of the high demand periods of the year. So, upon renewal of the current agreement tailor the lease term so it expires in peak letting season of the year. This way should your tenant vacate your property will be available during a premium reletting period resulting in a shorter vacancy and the chance of achieving a higher rental.

Resolution number two: Have you revisited your investment loan terms?  Rates are very competitive at present and many lenders are now offering incentives to property investors to switch and to enter into new loan terms. This is a great opportunity to fix your loan at a historically low rate.

Resolution number three: Review whether you need to update any fixtures and fittings to enhance the rental and capital value of the property. Now is the perfect time to plan this value enhancing exercise. Firstly we are entering into the final six months of the financial year so such works are advantageous from a taxation perspective. Secondly, undertaking improvements be it installing a built in robe, or new blinds, even new tap fittings is often enough to show your tenant that the property is definitely worth staying in for the long term.

Article and research on behalf of LPMA (Leading Property Managers Australia)

 

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THE HIGHEST RENT IS NOT ALWAYS THE BEST OPTION

by Administrator 8. December 2014 19:00

Our role as your property manager is to maximise the rental return on your investment property - however, obtaining the best rent per week is just one component of ensuring that your investment delivers the expected returns.

The term “best rent” refers to the optimum rent that your property can achieve without causing your tenants to vacate the property due to the rent being above market or; if vacant - the rent is above market, which in turn creates extended days of vacancy and lost income.

A consistent income stream is vital to ensuring the financial success of your investment property.

We have found that properties that have a rent slightly below market levels have a higher occupancy rate which means lower vacancy and fewer nil income days.

Another important factor that is often overlooked by investors is that, each time a tenant vacates and another moves in, there will be inevitable wear and tear on the property, which again adds to the financial burden of a vacancy.

When we suggest a rent increase or suggest that the rent remains the same, both due to market conditions, we make the recommendation on the above grounds to maximise the financial return on your investment.

While it is often tempting to squeeze an additional few dollars per week from your tenant, it is important to remember that today, tenants are far better educated due to the growing ease of access to information of all properties on the rental market. In attempting this squeeze, many property investors are causing increased vacancy and loss of rental income - all for the perceived benefit of achieving above market rent.

To discuss achieving the “best rent” for your investment property, please contact M Residential.

(Article and information thanks to LPMA)

 

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