Most investors who hold property long term, do so with the intention to benefit from capital growth in the value of the property. But let’s not forget that it’s the rental income which makes that long term hold both possible and profitable.
The rental income usually goes most, if not all of the way, towards covering the holding costs or mortgage, rates and insurances etc. Sustaining that all-important rental income, maximising your returns and minimising the risk of extended vacancies, reduces the risk of having to fund those costs out of your own pocket for any extended period of time.
So how can you reduce that risk? Simple, by attracting and keeping the best tenants for your rental property. When your tenants are moving on, the next most important thing is finding your next tenant quickly.
Here are our top tips on how to rent your property faster:
1. Keeping up appearances
Before you even advertise a property for rent, you should get plenty of internal and external photos taken, preferably professional quality, but only when it’s looking it’s very best, which can be achieved by:
- Cleaning out gutters
- Repainting the interior and/or exterior if required
- Pruning shrubs and trees
- Mowing the lawns
- Re-mulching garden beds
- Connect the power so the property doesn’t look dark or dingy
2. Stay on top of repairs and maintenance
Sometimes we can be guilty of giving more regular attention to maintenance and repairs to our cars than we do to our investment properties. Yet your property is not only worth a lot more money, it’s also going up in value not down!
One way to attract and keep tenants is to ensure you attend to any repairs as soon as they’re reported. Maintaining your property will make it a more attractive home to current and prospective residents. It will safeguard its long-term capital value and can be attended to as the need arises, rather than one larger outlay.
3. Keep the appliances current
A modern kitchen with stainless steel appliances, adequate storage and bench space will capture the attention of the most likely decision maker. Sorry guys we know you cook too, but it is often the female partner who will veto a property choice if she finds the kitchen disappointing.
Dishwashers and air conditioners are now considered everyday essentials. Ample light and ventilation, and quality window dressings also impact on the appeal of the property, and will keep your tenants, and your bank account, happy.
4. Kerb appeal and first impressions
You never get a second chance at a first impression. Many tenants will register to inspect a property, but will cancel after a drive-by if the kerb appeal is less than pleasing.
Your tenants are responsible for the gardens while living in the property, so make sure your property isn’t being advertised while looking untidy. It’s a good idea to keep an eye on how large or overgrown your garden may have become over time. An annual trim or tidy-up is a great idea before trees or shrubbery become big, or potentially dangerous.
5. Value Adding
Small refurbishments and updates can be a profitable way to increase your rental yield and long-term tenant prospects.
It’s important to avoid over-capitalising, so concentrate on cosmetic improvements which impact the overall appeal. These can include a fresh coat of paint, replacing tired carpets, cleaning and re-sealing kitchen and bathroom silicone and grout, updating fans, lights and tapware. Improving the visual appeal of a property increases demand which in turn translates into shorter vacancy periods.
6. Know your market price point
Changes in local demand and supply can sometimes cause a shift across different rental markets. Stay up to date with what’s happening in your market in order to meet rental price expectations.
While you don’t want to undersell your rental property, you also want to avoid alienating potential tenants by asking too high a price either and having your property sit vacant for an extended period of time. Remember that one week of missed rent at $450 will quickly add up to more than a $10 per week price difference.
7. What about pets?
As a property investor you want to minimise any potential damage to your investment.
However, when you consider that around 63 % of all Australian households own a pet of some kind, you can see how discriminating against our four legged friends could significantly reduce your potential tenant pool. There are of course Pros and Cons for Allowing Pets in Your Investment Property.
8. Professional screening of tenant applications
Part of the role of a professional property manager is to act as the middle person between yourself and your tenants. Property Managers are generally great judges of character and are quick to read the signs of an applicant who is either concealing a poor payment history or issues with the condition and presentation of their previous properties.
Part of that process will include checks against national databases, affordability and employment checks and personal references. The best time saving strategy long term, is choosing the right tenants in the first place.
9. Are you advertising where tenants are looking?
In excess of 90% of rental property enquiries are generated via real estate portals in Australia, predominantly realestate.com.au and domain.com.au, and the vast majority of those are viewed on smart phones and tablets. For this reason, good quality photos are important as is quality professional marketing text.
A poor quality photo taken on a phone camera and an advertisement that reads like a shopping list will most likely miss the mark, and therefore not generate the volume of response which will allow your property manager to have a range of choices about, who to rent to, how soon they can move in and how long they wish to stay.
10. Is your agent using an online booking portal or smart app with a database of ready tenants?
InspectRealEstate (IRE) is an online real estate booking system and phone app which allows tenants to book to attend scheduled property viewings, helps property managers to register who has attended, who will be applying and then report back to the owner in real time at the end of a property viewing.
Up to date technology like this provides many time saving benefits. and communicates efficiently with all interested parties. It lets tenants and landlords know how an application is progressing as well as alerting potential tenants when a suitable property is about to become available.
Often a pre-qualified tenant is just waiting for the right property to come up.
11. Advertise well before the property becomes vacant
Keeping the objective of the minimum days vacant front of mind, there are two considerations here.
Once a departing tenant gets close to their move date both the house and the stress levels can be in disarray, so it’s best to get the sourcing of a new tenant and viewing inspections out of the way early. The second consideration is that most tenants are needing to give at least 2 weeks’ notice at their current property. So start advertising a month before the property becomes vacant.
Getting organised early can mean the property is only vacant for a matter of hours or days, rather than weeks.
12. The vacate process done right
Giving your outgoing tenants a clear list of cleaning expectations in the form of a checklist well ahead of their vacate date should allow ample time for them to handover the property in a very clean and tidy condition. Let them know the next tenant is moving in straight away. The property manager will attend to do the Exit Condition Report, arrange for any cleaning or maintenance issues to be addressed, book an inspection of the smoke alarms and all going well your new tenant should be able to take up residence the following day.
By law, tenants are entitled to a reasonable time to go back and rectify any cleaning or gardening oversights. Similarly, if that timeframe is dragging on or the next tenants move in date is imminent, you are entitled to instruct your property manager to get a contractor in to attend to the work and deduct the payment from the bond.
13. What about timimg?
Many rental markets experience periods of higher and lower demand throughout the year. On the Sunshine Coast demand is lower over the winter months and properties can remain vacant for longer. Conversely demand is highest over the summer months as many families prefer to relocate around the end of the school year.
If your property has become vacant in that quieter time it would be worth allowing your tenants an initial 6 month lease, then renewing during the busier time for 12 months. This would bring your lease renewals into line with the peak demand periods. In the event that your property does become vacant again at the end of that lease, a new tenant should be much easier to find quickly.
No landlord wants to see their property vacant for any extended period. It is however something we need to plan for and have enough of a financial buffer to avoid a short vacancy causing stress. Whilst we all want new tenants quickly – we more importantly; want the right tenant.