So, Real Estate sale prices have been increasing at an astonishing rate, but this cannot be said of rental prices and more so, rental yields.
Whilst we have been seeing sales prices increase in the 20 something per cent over the last year or so we have only seen moderate rental increases in the area of 2 – 5 per cent.
With this in mind, boosting rental returns is now a key issue for owners of investment property.
When considering improving your property, you will want to be confident that an improved return is the outcome. This can come in two ways. The obvious is that the rent being achieved is greater, however there is also a less obvious way to increase your yield. This comes in the form of lower expenses on an ongoing basis and one of the best ways to achieve this is to have long term tenants. This will mean that you won’t be losing income from vacancy between tenancies as well as saving on the expenses such as letting fees and advertising when your property is vacant.
There are some things you can do to both improve the rent you can achieve as well as keep your tenants longer. We are finding that a few small things such as good security, built-in wardrobes, air conditioning and a dishwasher are now making properties easier to lease and tend to be achieving higher rents.
Other things that may also be considered if your property is becoming old and stale are new paint and flooring as well as possible things like a new kitchen. Whilst these may be on the higher end of your expenses, we have seen increased income in the order of 20 – 30% of the cost to carry out these projects. That’s actually outstanding considering you may be currently achieving 3 – 4% return on the property itself.
Owners can also boost the rent their rental return by considering renting to a tenant with a pet. Pet owners will generally pay a higher rent to secure a property, and a pet clause protecting you can be included in your lease.