For property to remain a fruitful source of income, investors must focus on long-term rental yields.
High rental returns are the cornerstone of successful property investment and there are several ways you can help boost your rental property income. If you’re looking to get the most from your investment and boost rental yields, here are some proven tips to help:
1. Minor cosmetic makeovers that create massive impact
You don’t have to spend a fortune to improve your returns on a rental property. In fact, minor cosmetic makeovers, such as fresh paint jobs, tidying the garden and improving the lighting can make a big impact.
Kerb appeal is also critical for higher rental returns. Investors can make their properties more rent-ready and attractive to tenants by showing a little TLC.
Some simply ways to boost your property’s appeal could include re-painting the front door, upgrading exterior lighting, power washing garage doors and investing in some landscaping. Built-in concrete planters, new garden paths and freshly mulched garden beds can also go a long way to increase kerb appeal. Trees, good landscape design and easy-to-maintain plants may also help to increase property value – and could boost rental returns.
2. Invest in high value renovations
For budgets with extra breathing space, investing in high value renovations can increase your rental yield and keep your properly aligned with the current market. However, it’s crucial to speak with your property manage about any major changes to ensure the renovations are worthwhile. This saves you investing your time and money into something that may not offer you the best return.
Kitchens and bathrooms add the most value to a home, as these are prime spaces. If you can’t do a complete gut job, focus on updating the fittings and fixtures. Cost-effective, modern tiles can also transform the bathroom, while updated appliances can modernise the kitchen. Instead of ripping out old kitchen cabinets, consider replacing the doors and handles or salvaging to save money. Structurally sound rooms can also be enhanced via a new colour scheme, benchtops and flooring.
Improve the property’s appeal through smart renovations. Items such as air conditioning, security screens and dishwashers have a big influence on the rent and attractiveness of your property, enticing prospective tenants.
Investors with established properties may also want to consider updating interior doors with modern handles and secure locks, adding new window treatments and updating flooring. Ripping out old carpet or floor tiles can be a big job, but it’s a large-scale improvement that could have a huge impact.
3. Add additional living space
Property extensions, such as adding an extra bedroom or living area may add significant value to a property.
Granny flats are another option to potentially boost your returns. If space or budget doesn’t permit however, you could convert a loft or garage, or remodel the interior by removing non-bearing walls to open up the space.
It’s important to consider the demographics of the area and the needs of your target tenants before making these changes. Additional bedrooms or living spaces can add considerable value to a property, but bigger isn’t always better if that’s not what your tenants are looking for. Two-bedroom dwellings in Melbourne’s inner city, for example, are experiencing the biggest price growth with a median price climb of 14.7%, while four-bedroom homes have only increased 8.5% in the same area.
4. Hire a good property manager
Investors can also increase their rental property income through a reputable property manager.
Engaging with an agent offers valuable insight into the property market and opportunities to boost rental growth. They also have a good understanding of owner’s needs, so can assist with your property investment journey.
The right manager can make a big difference with the results of your investment. Ultimately, you want the best service rather than the best deal (the saying you get what you pay for reigns true here!). However, review property management fees on a yearly basis to ensure the arrangement is still aligned with your property investment goals.
5. Stay updated with market changes
Property investment shouldn’t be a set and forget opportunity.
As an investor, you want to keep your finger on the pulse with the latest market changes. This may present opportunities to increase the rent or offer long-term leases. Although a great property manager will keep you updated and offer expert advice along the journey, it’s a good idea to do your own market research and educate yourself.
6. Be tax savvy
Do you know what property items are tax deductable?
Rental property expenses can boost your tax refund, increasing your overall yield. Maximise your tax savings by claiming essential items. Some of these may include:
- Property insurance
- Repairs, maintenance, servicing costs and renovations
- Advertising for tenants and property management fees
- Water charges
- Pest control
- Lease costs, including preparation, registration and stamp duty
Owning an investment property can be a rewarding journey, especially when the rental returns are healthy. Australia is considered a lucrative country for property investors because of the good rental yield. So how will you be increasing yours?
This article is written by Jayde Ferguson, who recommends 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+.