A quality investment property in a great location sets the foundations for success when you’re a landlord. Not only will your property lease faster than less desirable properties, but the capital growth can also make for a nice nest egg in the future. In the meantime, there are a few things you can do to make more money from your investment property. Below, we outline three things you can do to maximise the money you make.
Review rental prices regularly
Rental prices aren’t static. When the time comes, such as the end of a tenant’s lease, ensure you and your property manager assess whether there’s room to raise the rent you charge. Of course, the key here is being mindful of the market and not increasing the price so much that you end up with a long vacancy period.
To make sure the rent you charge hits the balance between being competitive in the market and helping you derive the most value from your property, check what similar properties in your suburb are charging each week. This exercise gives you an idea of what’s good value in your area and whether you are over or undercharging. And if you’re considering increasing the rent when you offer a tenant the opportunity to renew their lease, make sure you give them plenty of notice and abide by the relevant tenancy laws in your jurisdiction. Your property manager will be able to help you with this to make sure everyone is happy and everything is above board.
Keep your property updated
Refreshing your investment property doesn’t need to be expensive. Simple updates such as a fresh coat of paint or tidying up the lawns and gardens can help make a positive first impression on quality tenants. And if other items such as appliances are starting to see better days, consider updating these too. While it’s an upfront investment to update appliances, it can help you attract better-quality tenants. To minimise the time that you’re out of pocket for things such as spending on new appliances, consider making these purchases at the end of the financial year.
If you’re interested in tackling a larger update to your property, you could look at renovating to create an extra bedroom or study area. Additional bedrooms can be a great way to open up your property to a wider tenant pool. Similarly, creating dedicated spaces for at-home work and study is a smart way to attract tenants who work from home.<
Keep records of expenses
Make sure to keep thorough records of expenses year-round. Seek your own independent tax advice. These records might include a depreciation schedule, documenting your interest expenses, invoices and receipts for all costs incurred, and receipts for deductions. If you are conducting your own inspections and viewings, you could keep a travel log as you may be able to claim on mileage.
Owning an investment property is a great way to build wealth and generate cash flow. By being mindful of what you’re charging for rent, keeping your property fresh and updated, and maintaining detailed records, you can maximise the money you make from your property. If you’re looking for ways to make more money from your property, talk to your property manager to see if any of the options above are suitable for your situation and if they have any other ideas that will work for you.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.