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11 Tips to Boost Your Rental Yield

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    Every month, tens of thousands of Australian property investors look for ways to boost their rental yield online. The rental yield will probably be on your mind if you've had your investment property for a time and it's not giving you the profits you want.

    It can be challenging to start, though, and to know what to look for.

    The annual rent your home brings in is its nett rental yield. After deducting maintenance expenses, you calculate it as a percentage of the property's worth.

    A reasonable rental income in the Australian real estate market will fall between 3-5 percent, depending on whether you own a suburban or a rural home and how well it's maintained.

    Fortunately, investing in strategies to boost the earnings on your rental property doesn't have to be expensive.

    We've put up a list of suggestions to assist you enhance the cash flow from your rental property. You'll observe how even minor adjustments can significantly affect your rental yield.

    1. Get pet-friendly

    Australians adore their furry pets, let's face it. 30 percent of households in Australia that keep pets also rent their homes, making up about 61 percent of all households. It is obvious why you should allow pets as tenants in your rental home.

    Renters who have pets are willing to spend over 14% more for a pet-friendly property. If you let your tenants bring their fluffy significant other, you can charge more for maintenance and cleaning.

    Making decisions based on individual circumstances is lovely. Small pets may thrive on your property, but larger animals may not. You must consider the pet's size, the type of property you have, and if it will fit before making your decision.

    Learn how to pet-proof your investment property, and make sure you have landlord insurance in case anything goes wrong.

    2. Tidy up your front yard

    With prospective tenants or even buyers, the front yard of a property is like the first handshake. It need to be spotless! You don't want your front yard to be a depot or to have three-month-old grass growing on it.

    Fortunately, maintaining a clean front yard is easy and affordable. You can either handle the lawn-mowing and weed-pulling chores yourself or, for a reasonable fee, hire someone else to do them.

    Consider low-maintenance plants like hedge plants to add interest to this area. Native plants and succulents are some other low-maintenance possibilities.

    The area might potentially be levelled, a fresh lawn put in, or other buildings like benches or fountains added.

    3. Spruce up the backyard and outdoor living area

    Australians adore having a welcoming backyard where they can unwind. A fantastic approach to raise your rental yield is to upgrade the outdoor living area.

    According to a recent survey, 58% of Australians prefer gardens to city vistas.

    Australians are spending more time at home as a result of the current work-from-home craze. Your tenants are eager to pay more for a fun outdoor space that allows them to amuse their visitors and themselves.

    Purchase quality outdoor furniture. Inspection tenants will fall in love with the location with the addition of a BBQ as the icing on the cake.

    4. Refresh the property with light renovations

    You can't go wrong when it comes to giving the interior of your house a little TLC. Your rental yield can be significantly impacted by even the smallest modifications.

    Here are some low-cost improvements you can make to the building to raise its value:

    1. Professional Cleaning: You can utilise that when you advertise the rental property to enhance your rental return if you engage a tradesperson to give the place a thorough clean, especially the kitchen and bathrooms.
    2. Bathroom: Replace the shower curtain and caps. Alternately, move on to updating the floor tiles and walls.
    3. Carpets: Give the carpets a thorough cleaning to renew them or get new ones.
    4. Repaint: A fresh coat of paint gives a living area more energy. Choose neutral hues like white or beige. An additional $10 in weekly rent is required for a fresh coat of paint.
    5. Renew curtains: With some high-quality drapes, the rooms will have personality.

    5. Modernise the rental property

    You want your rental to meet up to tenants' expectations. A strong internet connection is now essential for most people in the digitised society we live in.

    Increase the electric outputs first. Tenants with busy schedules who frequently need to charge their gadgets would appreciate it.

    In Australia, the obligatory NBN rollout is already well underway. Install it for your property since you will soon need to do this.

    And why not make your house a smart home if you want to take it a step further?

    Start by purchasing some smart plugs and lightbulbs and spending money on a virtual assistant like Google Home to do that.

    6. Add storage space to your investment property

    Your tenants will be happier if your property has extra storage space available.

    The rental revenue of your property can be increased brilliantly by converting unused space into storage space.

    By including built-in closets and storage units in the garage, you can increase the available storage space.

    Replace the pantry and cabinets in the kitchen. More kitchen storage is always appreciated by tenants!

    7. Upgrade the rental property with complete makeovers

    Complete makeovers are unquestionably one technique to enhance the cash flow from your rental home significantly.

    The improvements we've suggested below cost more than those on our earlier lists. Some home upgrades, however, will qualify for tax deductions and offer a higher return on investment.

    1. Renovate the bathroom: Repaint, retile, and replace showerheads, faucets, and the vanity. You can raise the rent by up to $20 a week if you instal a contemporary bathroom.
    2. Add bedrooms: Property returns on rental are higher for homes with more bedrooms. If possible, make a study or one of the living spaces into a second bedroom. However, having a distinct workspace is great even when we're working from home.
    3. Upgrade kitchen/laundry: Renew the laundry and kitchen appliances. This will raise your property's value and reduce future repair expenses.
    4. Install/renew cooling and heating systems: You can raise the weekly rent by 8.5 percent if you instal a central cooling and heating system.
    5. Furnish: Think about letting your house out furnished. We are investing in delivering your rental, which will result in a 20% boost in rental yield.

    8. Add car space to your rental property

    If they have to search for parking every day or walk five minutes from where they park their car, your tenants who own cars will perceive this as a major disadvantage.

    Therefore, if you don't already have one, we advise investing in a parking space for your home.

    If you include it in your rental property, it will be quite valuable and raise your rental income. This is especially true in urban locations where it might be difficult to get off-street parking.

    Additionally, it will raise your property's total value, which is beneficial if you ever decide to sell.

    It's true that doing this for many investment properties is impractical, especially if you have a smaller flat. However, if you are given permission, you can construct a driveway, set aside off-street parking, or reserve a parking space.

    9. Install solar panels

    Have you given solar energy a thought? Renters are drawn to homes with solar panels. It entails cost savings on their electricity bills as well as the advantage of getting their electricity from a more moral source.

    This will enable you to increase your rental income by charging tenants an extra $20 each week. Solar panels will increase the sale price by up to $10,000 when it comes time to sell. Additionally, you'll be contributing to the environment.

    If you're interested in installing solar panels on your rental property, have a look at our solar installation checklist.

    10. Improve the safety features of your rental home

    For a safer residence, tenants will gladly pay more. Replace your rental property's locks and bolts if they are beginning to squeak. Install an alarm system and screen doors. If it's a house, you can also instal fencing.

    If you have a pool, make sure it is locked up.

    Renters who live in a safe, well-equipped house may qualify for a discount on their contents insurance. Therefore, it is reasonable to claim that they can afford to pay that little bit more in rent, which will increase your rental yield.

    11. Hire a property manager

    For advice on how to manage your investment property, including how to raise your rental yield, a professional property manager can be a fantastic resource.

    They'll be able to evaluate the condition of your rental property and suggest ways to make it better. They will be aware of a good fit for your particular rental and your target market because they have previous expertise with modifications and renovations.

    Additionally, property managers can use their trusted network to locate you better estimates from professionals.

    For suggestions on how to enhance your rental home, property managers can be a valuable resource.

    A little goes a long way when it comes to raising your rental yield.

    Every recommendation we've made here might not be applicable to you. Even if you only do what you can within your current budget, your rental yield will still rise, so the more the merrier.

    Why You Need a Property Manager With a Great Tenant Experience

    The landlord-tenant relationship can be erratic and requires ongoing maintenance. Contrary to what many investment property owners believe, once they employ property management, they no longer need to worry about this.

    Consider instances where tenants have extended vacancies or broken their contract early. In that instance, you have reason to believe that your property manager isn't doing their part to foster a positive working relationship with the tenant. In turn, your (the landlord's) relationship with the tenant deteriorates.

    You'll discover that your tenants seldom ever renew their leases, break them early, or approach you with the issues you pay your property management to address if you don't take certain efforts to ensure that your property manager fosters a great landlord-tenant relationship.

    If you want to learn how to ensure that your property management keeps your renters satisfied and how to establish the property manager-tenant connection, keep reading.

    Read our advice on keeping renters satisfied if you're a self-managed property owner (DIY landlord) looking to improve the tenant-landlord relationship. This essay focuses more on the part your property manager plays in this situation.

    Why do content tenants matter, then?

    You want them to stay as long as possible because it can be difficult to locate good tenants, as you may have discovered in the past. On our real estate blog, we frequently discuss how one of the best ways to maximise the returns on your investment property is to keep the tenants satisfied.

    Happy renters lead to shorter vacancies, which means you have a reliable revenue stream for longer stretches of the year and don't have to deal with the inconvenience and expense of advertising your property every six months.

    Simply said, a satisfied tenant is a long-term one that maintains your property well and pays their rent on time. It's essential to effective property management.

    Landlord and tenant are both pleased!

    There are four ways that effective property managers help maintain a positive landlord-tenant dynamic.

    Owners are aware of the power they have as your first line of defence, but your property manager has the power to improve or break the rental experience for everyone involved.

    According to 36% of the real estate investors we polled, having faith in a property manager's skills is a major concern when looking for a new agent.

    The relationship between the property manager and the renter can be improved by focusing on four main areas.

    1. Regular communication

    Lack of communication is the main reason why most relationships fall apart, and landlord-tenant interactions are no exception.

    Surprisingly, a study found that 44 percent of tenants found their property managers to be unresponsive. Tenants thus don't bother to report required repairs or ask for assistance when they need it. You, the property owner, have bad news!

    However, when property managers are swift in their responses, deal with complaints in a reasonable amount of time, and are good at acknowledging things, your tenants feel heard and realise that you are concerned about their requirements.

    As long as they have good procedures and routines in place to let your renter know that they're looking into it, then it helps make a world of difference. This does not mean that they must answer every call or text as soon as it rings.

    2. Quickly addresses maintenance and property issues

    Two of the most frequent excuses given by tenants for terminating their lease early or choosing not to renew it are property maintenance and repairs.

    The tenant won't be happy, and for good cause, if issues like mould, blocked sinks, and broken locks go unfixed or at the very least ignored for weeks on end. Such a rental is unattractive to anyone!

    Tenants value acknowledgement and responsiveness to let them know that something will be done about the problem, even if it cannot be resolved immediately away.

    This not only encourages long-term occupancy, which lowers vacancy rates, but it also keeps costs down and your property well-maintained.

    3. Honors the privacy of your tenants

    Any unexpected inspections or visits could get you into a lot of legal trouble.

    Additionally, it's a good idea to respect their privacy if you want to keep your tenants satisfied. You don't want to enter the room uninvited and find them on the couch in their underpants!

    Good property managers are aware of their tenants' rights and obligations in Australia and know how much notice to give before routine inspections.

    The landlord-tenant relationship can be severely harmed by feeling like you're being watched and that your property management is nosing around. Because of this, excellent agents understand the need of respecting the renters' privacy.

    4. Remaining cordial but expert

    An effective property manager understands that maintaining a positive landlord-tenant relationship requires striking a balance between being approachable and getting along with tenants and remaining professional and treating the rental property like a business.

    A professional property manager makes tenants feel at ease and confident in approaching them with any problems they may encounter, which contributes to the development of a reliable rapport and a solid reputation.

    Tenants don't seek for property managers who are overly amiable or who they can go out drinking with. Instead, someone they can trust will uphold their limits while being strong, rational, and courteous.

    How to evaluate the tenant-property management connection

    It might be challenging to determine whether your property management is fostering a positive landlord-tenant relationship. After all, you won't hear much if everything is going according to plan, which is a wonderful thing. Having said that, it shouldn't be too quiet, and if you have any worries, it can be helpful to speak with your tenant directly to find out how things are doing.

    The following are some red flags to watch out for:

    • Because a problem isn't being resolved, the tenant has contacted you personally.
    • Tenants never consent to lease extensions.
    • Early rental agreement termination by tenants.
    • You don't know how the tenancy is going since the property manager keeps you in the dark.

    If this sounds familiar, it might be wise to stand back, assess the level of care you're receiving, and think about changing property managers.

    Keep in mind that there is reciprocity involved in the landlord-tenant relationship. If you attended to their needs, it would be beneficial.

    You'll be a satisfied landlord as long as your property manager has a long-term objective of fostering your renters' loyalty, provides regular communication, and effectively attends to their needs.

    Summary

    The annual rent your home brings in is its nett rental yield. After deducting maintenance expenses, you calculate it as a percentage of the property's worth. A reasonable rental income in the Australian real estate market will fall between 3-5% depending on whether you own a suburban or a rural home.

    Australians are spending more time at home as a result of the current work-from-home craze. Your rental yield can be significantly impacted by even the smallest modifications.

    Here are some low-cost improvements you can make to the building to raise its value.

    The rental revenue of your property can be increased brilliantly by converting unused space into storage space. You can raise the rent by up to $20 a week if you instal a contemporary bathroom. Some home upgrades will qualify for tax deductions and offer a higher return on investment. Renters are drawn to homes with solar panels.

    Solar panels will increase the sale price by up to $10,000 when it comes time to sell. Renters who live in a safe, well-equipped house may qualify for a discount on their contents insurance. Landlord-tenant interactions are no exception. Lack of communication is the main reason why most relationships fall apart.

    Happy renters lead to shorter vacancies, which means you have a reliable revenue stream for longer stretches of the year and don't have to deal with the inconvenience of advertising your property every six months.

    A study found that 44 per cent of tenants found their property managers to be unresponsive. Tenants value acknowledgement and responsiveness to let them know that something will be done about the problem. Maintaining a positive landlord-tenant relationship requires striking a balance between being approachable and professional.

    Tenants don't seek for property managers who are overly amiable or who they can go out drinking with. Instead, someone they can trust will uphold their limits while being strong and courteous. A professional property manager makes tenants feel at ease and confident in approaching them with any problems.

    Between 5-8% rental yield will provide a good return on your investment. Establish your rental yield by dividing your annual rental income by your total investment.

    How to calculate rental yield
    1. Take your property's annual rental income.
    2. Take your property's purchase price, or current market value.
    3. Divide the annual rental income by the price / value.
    4. Multiply the figure you get by 100 to give you the yield percentage.

    The 2% rule is a restriction that investors impose on their trading activities in order to stay within specified risk management parameters. For example, an investor who uses the 2% rule and has a $100,000 trading account, risks no more than $2,000–or 2% of the value of the account–on a particular investment.

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