Top 6 tips for renting out your property
With any investment comes a level of risk. One of the most notable risks of property investment is renting out your property quickly and to quality tenants. Prospective investors should do all they can to mitigate the risk of vacancy and ensure long term tenancies. Current market conditions and employment uncertainties have left many feeling worried about their investment properties.
Despite the uncertainties and the changing rental environment, our clients are continuing to achieve strong yields and minimal vacancy. On average our clients are achieving rental yields between 4.5% and 5.3%. In the last few weeks alone, we had 3 clients purchase townhouses in Greenslopes, Brisbane, all of which were tenanted within 3 days of settlement for an average of 4.84%. We also recently settled 2 apartments in the highly sought-after suburb of Collingwood in Melbourne. The average yield achieved here was 4.6% and both properties were rented shortly after settlement.
There are several ways which you can mitigate the risk of vacancy and tenant turnover. Here are our top six tips for maximising your chances of attracting and keeping a tenant during these times.
Buy the right property
This is arguably the most important consideration. Buying the right property involves considering key factors such as proximity to transport, employment, shops, school, and parklands. Features, size, finishes, design, and layout of a property are also key aspects that will determine the attractiveness of your investment. An apartment can be repainted or carpeted at any time however, a small apartment that lacks natural light will always be compromised. The property you purchase does not necessarily have exactly what you’d like to live in as your tastes will differ to others, however, it does need to meet the demands of the local renters.
Get the right property manager
The best property managers know the market well, usually have a large database, are proactive in responding to potential tenants, arrange inspections at times the local tenant market can attend and are thorough with their reference checking of applicants. It’s worth taking the time to find the right property manager and sometimes paying the extra 0.5% for the right firm can be well worth it in the long term.
Advertise your property professionally
The way you present your property online will significantly influence your chances of attracting interest in your property. Having professional photos taken will make your property look more appealing and will ensure you show off the best features of the property. Although this sounds simple, first impressions are critical in attracting interest in your rental listing. The most successful property managers understand what’s required and how to highlight the most desirable aspects of a property.
Set a realistic price
The performance of rental markets fluctuates. There are numerous factors that play a part. As a landlord, you’re selling accommodation on the open market, therefore being realistic is critical in ensuring you can attract tenants. A good property manager will help you to understand the market and set realistic prices. A current example of this exists in Bondi and Sydney’s eastern suburbs where travel restrictions have meant that Airbnb’s have been converted into more traditional rental accommodation. This has led to an increase in rental property supply, therefore, to attract a tenant you may be required to marginally reduce your asking price.
The cost of an extended vacancy can be far more significant than the cost of a slight rent reduction. For example, a $20 reduction $650 to $630 per week is equal $1,040 or the equivalent of 1.65 weeks of lost rent. Essentially, don’t dig your heels in and demand that your property is worth a certain amount of money – its only worth what people are willing to pay at that point in time. Be realistic and flexible to avoid sustained vacancy periods.
Present the property well
A splash of paint on the walls and a professional clean between tenants can do wonders to a property. Prospective tenants often spend less than five minutes at a viewing before racing off to the next one. Make sure they remember is that it was nicely presented, not the stains on the walls or carpets.
Be a good landlord
Your tenant is effectively your customer and you need to look after them. Be responsive, fix issues promptly and don’t skimp on replacement items. If your property is well-presented and your tenants feel that you’ve committed to maintaining it, they’ll in turn treat it like their own home and will be less likely to leave. The less turnover you have, the less money you’ll spend on agents letting fees and advertising.
If you follow the above points, you’ll be maximising your chances of attracting and keeping a tenant. But make sure you have realistic expectations and speak to your advisor to have a contingency in place in case your property doesn’t rent right away.
If you have any questions on anything above, please don’t hesitate to get in touch with our expert team by clicking here