Looking for ways to increase the rental yield of your investment property?
Thankfully, it doesn’t have to cost a fortune.
Sure, renovating is the go-to option. But there are plenty more, including making some changes in the way your property is actually marketed and advertised.
One of the things you should keep in mind when sprucing up your property is that many tenants want their rental to feel like a home. The more you can do to give your place that type of quality, the more likely you’ll be able to find tenants at a higher rent.
Here are 11 methods you can use to give your property some juice.
1. Give it a big, big clean
Are you showing off your property to potential tenants? Dish out some cash to give everything a once over, including areas you may not even think about like skirting boards or light fittings.
Does your home come with a dishwasher? Ducted heating and air conditioning?
While it might be tempting to save some money and not provide these, you’re usually better off if you do. (And in many areas, heating and cooling is simply expected as the norm.)
Yes, it’s a little extra money, and yes, there’s always the possibility that something happens to them. But they’re a big plus for tenants – and the value of your home. A well-installed, reliable heating system installed by professionals can be expected to last many years with proper use.
3. Be flexible on pets
It’s amazing how many landlords won’t rent to tenants who have pets, (and perfectly understandable in some cases). We’re not suggesting you let any animal roam free in your property, but having a more open policy can increase interest - tenants will be willing to pay a little more if they can bring a cat or dog along and not have to hide them.
Again, this goes back to the idea of making a rental property a home - tenants want to feel comfortable and stable, and having a family pet allowed is a big part of that.
Of course, this means you’ll have to be crystal clear in your lease about what happens with damage to your property and you’ll need to make sure you have proper insurance.
We’ve actually prepared a list of special conditions you should include in your lease for pets:
[emaillocker id="11729"]Read our list here.[/emaillocker]
You should really think about this: Australia has one of the highest rates of pet ownership in the world and a whopping 50% of rental properties have a no-pet policy.
I’ve seen it time and time again. The simple rules of supply and demand suggest that if you consider pets in your property, you can charge more rent.
The other huge benefit? Tenants with pets are more likely to stay longer because they don’t want to go through the hassle of finding another suitable property.
These almost go without saying: if you’re putting in money into your property, then it’s going to seem more attractive. Particularly areas like a kitchen or bathroom, where tenants are going to spend a lot of time. (These increase the value of your property as well.)
You don’t even need to go that big. Some of these examples could always work:
- Try repairing instead of replacing, like giving your carpets a professional clean.
- Replace outdated light fittings. Even something cheap and modern looking will help.
- Replace door handles and knobs. This is something you can do yourself, is cheap, fast and effective.
- Replace any missing slats on blinds
- New benchtops
If you still fancy a full renovation, then focus on the kitchen and bathrooms - and give your property a full lick of paint.
5. References from past tenants
This is a little unusual, but if you’ve had a good experience with previous tenants than a reference or review can make you seem more trustworthy. Regardless if you’re using an agent or a platform like Cubbi, tenants can be a bit nervous – they want to make sure they’ll be treated right. Having references, even a photo, can be a great way to convince potential tenants.
You could even mention these in your advertisement by saying something like, “references from past happy tenants available at inspection”
I can almost guarantee none of your competition will have this.
6. Storage space
One of the biggest pain points for renters is having places to store stuff, and unfortunately, many units or even homes don’t have enough storage space. Having to store stuff in boxes in the spare bedroom doesn’t feel very homely!
Installing some yourself can be a great attraction for renters, including a shed, shelving in garages or even adding wardrobes to existing bedrooms. Really think about using every bit of space you can.
7. Solar power
This one is a little more expensive, but definitely worth it. Having solar power can be a great attraction for tenants as they’ll save plenty on their electricity bill, (which means they can afford slightly higher rent).
There are heaps of new technologies making it easier for landlords to not only install systems, but build them specifically for investment properties.
One in particular, Matter Solar, allows tenants to buy discounted electricity directly from the landlord - the company even installs the panels, bill the tenants and transfer payments to landlords.
8. Better photography
You’d be surprised just how much good photos can really change the look of your property. This boosts the perception of value and as we all know, first impressions count! Now, this isn’t about making the property appear like something it isn’t – but a decent camera can give better emphasis on elements like colour that are attractive to anyone browsing online.
It’s worth hiring a professional for this. Yes, you’ll pay extra, but you’re also paying for a professional who knows how to frame your property in the best way. (And they’ll make your listing pop out on a site like Cubbi!)
Most professional photographers would do a good job, but I highly recommend talking to these guys for good photos - they have very reasonable prices.
9. Entertaining areas
Providing areas such as a decking for entertaining and outdoor activities can make a rental seem much more attractive – and they will most likely raise the capital value of your property as well.
Is the front yard of your property in need of some care? Kerb appeal matters more than you might think, as potential tenants may drive past before checking out your property.
Putting in some effort to plant trees, flowers, or even some decorations like a nice new mailbox can do wonders for how your property is perceived. Making your property stand out from those around it is never a bad strategy.
Though be careful: requiring too much maintenance may turn some tenants away.
11. Sealed windows to reduce noise
If you’re in a busy area, or next to a train line, then tenants might be put off by the noise. If you offer sealed windows or other methods to reduce that noise pollution, it may very well be a great attraction for a possible tenant. The added bonus is that it can save them money on heating or cooling bills.
All of those are great ways to improve the rental value of your property, but be careful – you don’t want to spend too much money and not see a return. Think about what methods are going to give you the best value for your specific property and the tenants you want to attract, and then make careful, targeted changes.
Many of these changes also have a domino effect: they more improvements you make, the higher the value of your property is likely to be, and tenants are more likely to stay longer. Everyone wins.