Preparing Your Property For Rent And Improving Your Return
If you’re thinking of getting into the rental property market or already have an investment then your first thought is how much can I charge in rent or when and how can I increase it. The good news is with the latest forecasts and figures most industry professionals predict a high increase in residential property rents for this year given the extreme shortage in accommodation that the country is facing. Even before the pandemic hit, Australia was seeing an undersupply in housing, which is why we saw so many unit blocks popping up around the city.
Now on the back end of COVID-19 (fingers crossed) Brisbane and South East Queensland have seen a huge influx of interstate migration from Sydney and Melbourne. This is a key driver that is pushing up rents and prices as supply remains low. We’ll look at some rental property tips, so you’re confident by the time your tenant moves in or tenant renewal is due.
Setting the Rent While you are restricted by your target renter’s income bracket for the neighborhood, you can increase your price point for valued amenities such as a good parking area, an outdoor area, good kitchen, solar panels, and many more. Keeping your property in a good well maintained condition will also help you secure the maximum rent and more importantly secure a new tenant as quickly as possible.
The leading real estate listing and rental sites also let you track properties which can be useful to keep an eye on similar properties and the prices they are charging in your local area.
If you're looking to increase your rent during a tenancy then you also need to look at local laws for tenancies. In New South Wales, you can increase rent at any time, as long as you give 60 days’ notice. In the Northern Territory, you can do the same, except you only have to give 30 days’ notice. In Western Australia, you can increase the rent every 6 months with 60 days’ notice. In Queensland, rent cannot be increased during a fixed term unless it is stated in the tenancy agreement and certain criteria met.
Adding Value Renters have a variety of priorities before they decide where to move. You should have a good understanding of who and the type of tenant your location and property will attract. Are you going to attract families, young professionals, students, or someone else? What is most important to them; Good schools, pet-friendly, modern kitchen, and appliances? This will give you a clearer idea of where to spend your money and adding value to your property that your tenants want.
You can also look at what other people are charging and which properties seem to be the most popular.
Maintenance and Repairs As the property owner, you are responsible for maintenance, so it’s important to have a property that’s built to take a little wear and tear and any renovations or changes to the property are built to last. As a general rule of thumb while you want to minimise outgoings using cheap materials or bodging a repair will likely cost you a lot more in the long run!
Home inspections, seasonal prep, and general upkeep can go a long way toward warding off problems before they start. The tenant does also have some responsibility, but for the most part, you will be called if there are any issues. You also have to keep in mind what you’ll do if the tenant causes major damages. While you might be able to claim under the bond you still need to have a plan to get the damages repaired. This could take over a month plus to resolve so having access to additional emergency funds is crucial or your property will remain untenanted until you can withdraw money from the bond or wait for an insurance claim.
Entry Condition Report Both you and your tenant are required to conduct an entry condition report. While this might not help you increase the rent it will help in the event that you need to claim against the tenant's bond for any damages. Certain states or territories will have recommended inspection report formats, giving you a handy checklist.
Landlord Insurance Landlord insurance ultimately protects you from many of the risks associated with renting. For us, this is a no brainer and every landlord should hold a policy. Real estate and maintaining a property is expensive and while we can minimise risks such as screening our tenants, accidents can still happen and pipes can still burst! Property is a long game and the wear and tear on a property and the amount of tenants that go through over the next 30 years increases the chances of something going wrong. Without landlord insurance, you’re liable to pay for it all.
Should you use a Property Manager?
A property manager can be invaluable at this stage and when things go wrong. They know what to look for, how to structure your reports, and also have the market knowledge to help you increase your returns. If you are not very well organised and don't have the time to collect rent, organise repairs, undertake inspections, and market and filter out a good tenant then the answer is YES you do need a Property Manager. From our experience, a good property manager is worth their weight in gold and here in Brisbane, we have some amazing companies to chose from.
If you have questions about the property market, The Brisbane Broker is here to help. We have the great privilege of working with some of the best Real Estate and Property Managers across Brisbane and can help point you in the right direction to who will suit your requirements the best.
Call us today if you want to give yourself the best chance of success.