Real estate is one of the smartest investments you can make. Today, over 70% of Australians are homeowners. And it’s no wonder why either – with good property investment being the key to positive cash flow and healthy financial freedom. Aside from feeling the pride of ownership, Aussies are buying property to increase income and wealth accumulation. Tax benefits are maximised, asset values are multiplied and opportunities to capitalise on the physical assets are definitely there – but it’s essential to invest in the right property, in the right market at the right price first.
Maximising your property investment ROI is the primary goal of any savvy investor. You want a property that ticks the boxes and gives you the best rental return possible. Increased rental income not only makes those mortgage payments easier to afford, but it means that there is less money coming out of your pocket every week. Whether you’ve recently invested in your first property or you have a budding portfolio of more, you always want to ensure returns are maximised. A reputable property investment company will provide expert advice and can guide you through your property investment journey. To get you started though, here are a few tips to boost your ROI:
Know What Value Add-Ons Renters Want
For tenants, it’s always about location and price. But there are multiple value adding features which any smart investor should implement to yield the best return. Installing additional appliances, like a dishwasher, reverse-cycle air conditioning and a security system all go a long way in keeping tenants happy and secure. If they have the features and facilities they need in the location they want, they’re less likely to move.
Knowing what tenants need and what features will help your property to stand out from its competitors is crucial to securing a good investment. Remember, you won’t be living in the property so leave personal wants at the door and shift your focus to the renter’s profile. Make sure your property has ample storage, a parking bay and stainless steel appliances. Updated fixtures in the bathroom and kitchen are also necessary, as well as brightly lit open spaces. Fully renovated kitchens and bathrooms hold particular appeal too. By understanding what your tenants need, you’re more likely to have longer-term financial security.
Make Your Property Pet-Friendly
Aussies love their animals, so opting for your property to be pet-friendly already puts you ahead of many competitors. Recent debates are urging South Australia to introduce legislative changes which will see more tenants being able to have pets in rental properties. The ‘fair deal’ policy recognises that many Australians are putting the needs of their pets first and as a result, pet-friendly rentals have become a good investment.
The demand for pet-friendly rentals is definitely there, but there just aren’t enough properties to meet the demand – yet. Generally, pet-owning tenants make great tenants and are willing to pay more to find a suitable home. Pet-friendly properties also rent out a lot faster and can provide landlords and investors with a very big point of difference.
Keep on Top of Maintenance
Tenants love a well-maintained home. Minimise maintenance costs by investing in good contractors and vendors you can rely on to fix essentials. Properties that look good will naturally command a higher rent. To stay on top of things, have the property regularly inspected by a trusted group of go-to contacts. This way, tenants can trust routine maintenance is quickly and efficiently looked after. All fixtures and appliances should work correctly and maintenance issues should be resolved promptly to avoid them becoming costly issues.
Cosmetic changes and larger renovations are essential to prolonging the life of your property and keeping it aligned with the current market. Minor modifications can make a big impact, like a fresh coat of paint, kerb appeal or updated floor and window coverings. Upgrading the kitchen and bathroom are the big-ticket items and key places to invest in.
Matching the number of bedrooms with the target rental market is important too. For example; family oriented areas should have three or more bedrooms to be sufficient. Make sure the property has enough bedrooms and if needs be, considering adding an additional room as this will usually directly increase the rental value. Other key areas for renovations include the outdoor space – a deck and patio area are always welcomed in an Aussie property, and smart landscaping.
Offer Long-Term Leases
This is usually market dependent but tenants can be happy to pay extra for the practicality of a longer-term lease. Most renters don’t enjoy the hassle of moving because of the costs and time factor involved. If the market and tenants are right, you could save yourself periodically having to find new tenants by offering flexible lease terms. It’s a win-win solution that can keep both the tenants and you as the landlord happy.
Increase Rent Strategically
Lower rents generally lead to higher revenue but pricing your rental property right, according to the current market and its competitors is important. Renters can be more loyal when they’re unable to find a lower rental nearby, but that doesn’t mean that raising the rent periodically isn’t necessary too. One of the biggest constraints about moving house is the cost involved. If you price your property strategically and its value is still better than the value of a new rental plus the moving costs, then you have the upper hand. If the house is well-maintained and has all the essential features, tenants are more likely to stay long-term.
This article is written by Jayde Ferguson, who writes for Momentum Wealth. Offering market leading research and advice on the Australian property market, the company helps clients accelerate their wealth through property investment by assisting them in the strategic planning, financing, acquisition, management and development of their commercial and residential investment properties. Catch Jayde on Google+.