As investors ourselves, we know the aim of the real estate game and can appreciate that for first-time – or even seasoned, investors, real estate can be treated like a set-and-forget investment method.
But, in our experience, if you’re a property investor or seeking to buy your first investment property, the best way to maximise your rental return is to frequently assess the value of your investment. From here, you can make improvements that will enhance tenant appeal and increase the return on your portfolio.
When looking to buy a property investment you should consider the quality of the property and the potential for improvements. Having a well-presented property is more appealing and there’s a greater chance of securing better-quality tenants who will take care of your property which helps in the long run.
Some key things to look for include the number of bedrooms, the availability of parking spaces – whether that be a garage or off street parking, and of course the location of the property.
Keep reading to see how you can achieve increased rental returns on your existing properties.
Here are nine inspiring ideas to increase your rental income:
Got space for an extra bedroom?
More bedrooms = increased rent! Make a note of any large rooms that could be split to create an additional bedroom. Adding a bedroom can significantly increase the rental value of your property and allow you to charge a higher rent for your investment properties. Make sure any room you create can fit a double bed and wardrobe, otherwise you might not get a good payback from the work.
Become a building code guru
Before undertaking any structural work, property investors should ensure they meet all the building rules and codes. It’s important to do this before changing the configuration of the investment property. Failure to obtain the right permissions can end in a loss of thousands of dollars.
Bigger Bathroom
If the bathroom is small and tired and there is a bath, pull out the bath and only have a shower installed. This creates a bigger bathroom for tenants – not many people use baths nowadays and your prospective tenants will likely appreciate the additional space. Use existing plumbing as changing the location of pipes is expensive and disruptive and will undermine your return on investment.
Get busy in the kitchen!
A quality kitchen will drive up your potential for an increased rental income and attract good tenants. Replace damaged benchtops and consider lightening and brightening the room, keeping the colour palette throughout the home neutral. If you replace the benchtop, doors, and handles of the cupboards and drawers, tenants will believe they’re walking into a brand-new kitchen.
Upgrade your appliances
Check the condition of the appliances, and find out their age and when they may need replacing. Please don’t wait until they break down because the bill will be higher when that happens due to the urgency of needing to have the appliance replaced.
Carpet, Vinyl, Timber flooring – the choice is yours!
Presentable flooring has an enormous impact on tenants and the amount of rent you can charge. Fresh carpet is excellent, but many tenants prefer a timber floor these days. There’s a vast choice of flooring that covers every budget.
Get painting
Looking for easy ways to create a good first impression? Top everything off with a fresh coat of paint.
Keep your colours neutral and consistent. Neutrals can create the feel of a more modern space even in an older home. Keep in mind that feature walls can be off-putting and some good potential tenants will walk away if they don’t like your style. Note down the paint colours for you to utilise between tenancies for any touch-up preparation of the rental property between tenants.
Consider going pet-friendly.
The number of rental properties on the market that allow for pets is significantly low – a surprising fact given that over 64% of people in New Zealand have at least one pet. With so many applicants being pet owners, this is one of the easiest ways to increase rental income. As a pet-friendly property investor, you’ll be well-positioned to charge higher rent and increase your overall rental returns.
Another good reason to allow for pets is that you’ll have access to a much wider tenant pool which can increase your chances of finding great tenants who will stay long-term.
Want to know more about renting with pets? Click here.
Make sure you’re meeting the market.
One of the best ways to ensure you’re maximising your rental returns is making sure you’re charging the right amount for rent.
Legislation doesn’t limit how much landlords are able to increase rent on their property, but it does limit the frequency of rental increases to once a year. Your property manager will conduct an annual rent review on your property so you know you’re meeting the market and getting the most out of your investment.
