If you have recently decided that you want to rent out your house but are unsure of where to begin, you’re not alone. Getting started is one of the hardest steps for new property investors or landlords. The highest rental returns tend to stem from working with qualified professionals, who can not only ensure that the property is well cared for but that it has a consistently high occupancy rate.
This requires finding the right estate agent or property management firm to take care of the practical issues related to your rental.
1. Maximise your Property’s Occupancy
One of the first tasks as a landlord is to ensure that your rental home is occupied. You’ll only receive cash flow when the property is rented, so it’s important to try and reduce or eliminate any periods of vacancy. If you currently have a tenant, this means having a plan put in place in case the lease agreement isn’t renewed. Landlords who wait until the property is vacant before they start to market it could end up with several months of lost income, so it’s important to start this process in advance.
Seeking the services of a property management company is a good way to attract the right tenants. This can save time and money while offering greater peace of mind. Property managers will know how long it takes to rent out similar properties to your own, and will know how and when to start marketing the impending vacancy. When you are comparing agents or management firms, you should look at the marketing tactics used.
Good property managers may have professional relationships that could help fill vacancies. For example, they may have relationships with local employers at a nearby university or hospital, which could create a continuous demand for convenient accommodation. This is just one factor to consider when you’re comparing property managers. The faster that you can find qualified tenants, the faster you will receive your rental returns. For corporate rentals, your agent may suggest that you rent your house fully furnished. Furnished rentals may require you to spend more money up front, but they could lead to higher rental returns in the end. Your agent or property manager can advise you on how to best present your property for rent.
2. Keep Rental Properties in Top Condition
Part of being a successful landlord is ensuring that your property is kept up to date with any regular maintenance or repairs. Tasks such as deep cleaning can only be performed when the property is vacant, but small repairs can be taken care of when needed. If these are allowed to let slide, it could lead to the need for a major overhaul down the road which could translate to lost income.
This is another benefit of using a property manager. They can take calls from tenants regarding any needed repairs and arrange for maintenance on your behalf. If you take these calls yourself, you may find that becoming a landlord is a lot more work than you bargained for! Property managers often have professional relationships with plumbers and handymen, allowing them to provide these services at a lower cost.
The need for more extensive renovations or property upgrades will depend on your short and long term goals for the property. If you don’t plan on holding onto your property for a longer term, you may be able to save money by delaying repairs and upgrades. Yet if these problems are ignored for too long, it will impact the value of your property when you decide to sell. It could also deter good tenants from choosing your property as a rental. Modest upgrades can attract higher rents, in some cases.
It’s worth doing the math to determine if upgrades could help you attract and maintain high quality tenants and boost the value of your property. Your real estate agent can help you compare your home to others on the market to help with these calculations, so that you can stay competitive.
3. Choose a Realistic Rental Price
Another major component of maximising your rental returns is choosing the right rent to charge. If you choose a number that’s too high, you may suffer with a vacant property for a longer period of time. Yet if you shoot too low, this could reduce your total profits. A property management company will know the local rental market and be able to offer you professional advice keeping this in mind. The right rental price will depend on the demand in your area, along with the type of property you have. Obtaining a high return will depend on numerous factors such as the location, demand, access to local amenities, public transportation, and the condition of your home. Your property manager will take all of these into account to give you an appropriate range.
4. Contending with Difficult Tenants
Many tenants will be respectful to your property and pay their rent on time. Do you know what to do if rent is late or your property is damaged? It’s a good idea to know your rights as a landlord before you start renting. A good property management company will also be able to help you negotiate with difficult tenants. They can also follow up on late rent payments or other issues as soon as they arise, and can conduct thorough screenings to help prevent bad tenants from moving in. Taking care of these issues is vital to help you avoid costly repairs or lost income.
These are a few of the issues to take into consideration to maximise your returns. When a good tenant decides not to renew their lease, it’s also worth taking the time to find out why. If they were unsatisfied with the rental, this could be a sign that you need to take care of renovations, or that you may need to switch property management companies. This feedback can alert to you problems such as the following:
- Complaints were not responded to in a timely enough manner
- Repairs were put off rather than taken care of right away
- The property could use extra amenities or services to stand out from the competition
Anything that can make your rental appear more attractive than other local options will help you fill vacancies quickly. Taking care of repairs will also help you save on larger renovations in the future.
An ideal solution for many property investors is to choose a property management company. The right property managers or estate agents have a strong working knowledge of local rental trends, residential tenancy law, and marketing strategies. They also have professional relationships with repair and cleaning companies, to help keep properties in the best possible shape.