With rents falling for houses and units in a cooling market in most cities, it’s harder for property investors to attract good tenants while still making good returns on their investment.
Stephanie Livoti, director and senior property manager at Spade Property told Auction Day the key to maximising rental income for investors is to keep your tenants happy.
“I think we need to value the tenants a little bit more,” Livoti said.
“If you value your tenant, they will value your property. That means longevity and they will stay in your property. And that means long-term rental which means more money.”
Get more rent with these minor improvements
Investors should focus on making minor improvements along the way to keep tenants happy and listening to their feedback, Livoti advised.
The number one “dealbreaker” for tenants, Livoti says, is a property that doesn’t have a dishwasher.
Storage is important for tenants and Livoti says investors should ensure each of the bedrooms has built-in wardrobes, or the tenant will be put off by the extra cost they might have to bear.
Freshening up the bathroom with cosmetic changes doesn’t have to be costly for the owner and will be valued by tenants.
“Replacing your vanity will vastly improve the overall look of a bathroom. Even if you have the original 60s tiles, if you have a fresh vanity in there, it uplifts the entire property,” Livoti said
Replace the silicon in the shower and kitchen if it is mouldy and update dated tapware.
Aspiring property investors should look for certain features if they’re looking for a property that will give good rental returns.
Tenants will be attracted to properties in a good location with ample outdoor space, adequate storage and features like an internal laundry and lock up garage or car space.
What if your tenants are making unreasonable requests?
Livoti says it comes down to educating your tenants.
“There’s a stigma that landlords are all rich and we have lots of money to spend on these rental properties.
“Particularly now, that’s not the case. A lot of people are quite stretched to hold on to them.”
Streamlining requests for repairs is the best approach for owners and tenants.
“I ask my tenants when they move into a property to settle for a couple of weeks before you start sending through requests of anything you notice.
“That way the landlord just gets one list,” Livoti said, as opposed to multiple requests at different times which can make the owner think the tenant is being unreasonable.
Owners must keep in mind that there are some maintenance issues that need to be addressed immediately:
- a dangerous electrical fault
- a burst water service or a serious water leak
- a serious roof or gas leak
- a blocked or broken toilet
- a breakdown of the gas, electricity or water supply to the premises
- a breakdown of the hot water service, stove, oven or air-conditioner
Should owners allow tenants to have pets?
Owners should be open to pets, especially considering about 60 per cent of people have pets, Livoti says.
“In terms of damage, I think potentially small children could do more damage than a pet.
“The most damage I’ve seen in my 12-year career is some scratching at the back of a door. Sometimes you get stains on the carpet but that can be replaced, that’s what a bond is for.”
New changes to landlord insurance mean owners can claim on pet damage.
“Some of the policies cover up to $60,000 worth of pet damage if the animal is listed on the lease agreement.
“You do still get people who will offer a little bit more rent to secure the property because they do have a pet. It gives you more scope to select a quality tenant.”
Top 5 tips for increasing rental income and keeping tenants
- Be reasonable with any rent increases. Complete market research to ensure your rent increase doesn’t exceed market value.
- Offer another fixed term lease agreement if you are increasing the rent. This provides security for both the landlord and tenant.
- Ensure maintenance requests are completed in a timely manner
- Proactive improvements to the property
- Ask tenants for feedback. Ask if they owned the property, what would they do? Take on board their suggestions.