We’ve previously said that one of the unbreakable rules of investing is to never sell. Another great rule that goes with this, is to always have your property generating more money for you.
What you can do from the early onset of managing a property is to increase your rental yield. Rental yield is an essential aspect of property value. The ultimate goal is to increase your rental yield to secure good cash flow and propel you to wealth creation. Rental yield is the measure of how much income your property produces each year as a percentage of that property’s value. Below we discuss ways on how to increase your rental yield so you can reap the benefits.
We’re not talking about major renovations. We don’t have to splurge on major space transformations that will end up costing you more. Mini improvements that are necessary to update the space will do so much for your rent values. Repainting walls, replacing worn out carpets, changing the kitchen cupboard doors and handles, or fixing up the garden with low maintenance plants can improve the overall aesthetic of the space without the need to spend on extensive makeovers. Make sure to hire the services of skilled and professional tradespeople that can do these minor cost-effective renovations. An updated and aesthetically pleasing property can bring a premium rent that will pay back the cost many times over.
Regular inspections are essential in any type of property you own or manage. It allows you to determine the necessary repairs and improvements needed to maintain the integrity of the property. Regular inspections are typically done every six months. This is to ensure that everything is well functioning and identify any potential issues that need to be addressed. From ceilings to cabinets to sinks and walls, inspections enable you to catch the potential problems before they become large and costly repairs. Remember, the more money that goes out on expenses, the lower your net yield will be.
There should also be a yearly rent review to your investment property. Why? Because rates, water, strata levies (and just about everything else!) also go up every year. So if you don’t put the right property value based on comparable data, your yield will definitely decline. It’s that simple.
Keeping responsible tenants ensures you that your property will be well maintained and issues will be kept to a minimum. Reference checks and reviewing tenant databases are all part of the process. Though you can’t 100% guarantee that tenants will be great, you can observe how they are as tenants. Do they take care of your property? Do they pay rent on time? Are they easy to deal with when issues arise? If you say yes to all the questions, these are the characteristics and the perfect profile of a responsible tenant that you should have on a long-term basis. No tenant vacancy, no costly repairs, yes to high rental yield.
If you’re creative enough, you’ll find more assets to your property that you can use to increase your rental yield. Do you have a garage that can be rented out separately? Perhaps a garden shed that can be used as a personal storage room? If you chance upon a tenant that doesn’t really make use of the garage, find means to have someone else rent it when they need it. This is a great way to add to your yield without wasting any space!
As property investors and property managers, we want to help you get the most out of your investments. A9 Property provides first-time homebuyers and property investors knowledge on the world of real estate. Our weekly real estate blog discusses a variety of property-related topics, including property investment strategies, real estate industry trends, and current property market shifts to give you valuable insights and help you make informed decisions. We specialise in off the plan properties – a popular investment strategy in Brisbane and Australia. If you're looking to invest, Check out our carefully selected portfolio of off-market properties for sale or contact us for an obligation-free chat to discuss how you can succeed in the business and make the right property investments.