Investing in real estate is a great investment which virtually ensures profit through capital growth and of course the tax advantages associated with owning an investment property.
There are many ways in which the investor can maximise the income derived from their investment property. Most investors think that the only way to do this is by asking for or achieving the highest possible rent.
There are a number of invisible ways in which the property investor can maximise the income of their investment property.
First is to have an annual program of reviewing and increasing rents to a figure just below market rent. This ensures not only a growth in rental income, but by setting rent just below market rates, you ensure that your tenant’s perceived value and interest in your property and is more than likely to remain for an extended time, therefore reducing the chance of vacancy and real loss of income of minimising the chances of having a non income producing asset.
Another invisible way that investors maximise their investment property income is to tailor the lease term around the peak letting times of the year. Rather than having the standard six month lease term in place, savvy investors steer clear of standard lease terms and ensure that a lease term expires in the better letting periods of the year. In these instances, should the tenant vacate the property it will be on the market in a better reletting period which in turn reduces days vacant and increases the opportunity of achieving a higher rental.
By tailoring the lease term, the investor is taking advantage of market place conditions to ensure a better continuity of income and ability to have a greater chance to increase cash income via a higher rent achieved in a peak letting period.
Your property manager is pleased to assist you in tailoring your lease term to assist in maximising the income you derive from your investment property.