If you can find the right property, at the right price, in the right location, you’re looking at a recipe for success. Matching those three elements will do a lot to push your property’s value up over time.
Add in the ability to adapt to changing rental markets (and tastes) through renovations, and your chances of making a profit on your investment property are even higher.
If you’re about to purchase an investment property, you can often ask for a quote on renovations before you close. This is a great way to assess your current and potential future spending. Already closed the deal? Don’t worry, there’s still good potential to increase your returns. This article will cover a few simple things that can boost your property’s value, whether you’re renting it out or selling up.
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Regularly review the rent for your property
Rental property values are not a static thing. The amount of rent you charge should change and evolve over time to reflect the best return on your investment.
Compare what you’re charging in rent to what others are charging for similar properties in your suburb or surrounding suburbs. This will give you an idea of whether you’re under-charging.
It’s worth remembering rental prices may not always go up. If you find you’re struggling to find a tenant for your property, it could be that your asking rent is too high and will benefit from a decrease. You may be making slightly less money, but you won’t make anything if the property is left vacant.
Remember: It’s important to give your tenant plenty of notice before you make any change to what they’re paying in rent.
Refresh your rental property
Updating and refreshing your property with a few simple changes can be an excellent way to increase your rental returns. The good news? Not all property changes are expensive. There are many simple and affordable changes you can make that have the potential to earn you extra cash.
- Decorating: A newly decorated property (interior and exterior) gives prospective tenants a great first impression. They may even be more inclined to offer a higher rent to secure the property. Remember that colour preferences are subjective, so stick with neutral colours to avoid limiting your tenant pool.
- Gardening: First impressions matter, so make sure your property’s exterior is as appealing as the interior! Tidying up the garden and keeping the grass short is a good way to draw prospective tenants to your home. Where possible, aim for a low maintenance garden. You’ll find that renters are more likely to apply if they don’t have to spend significant time tending to a wide variety of plants and grass.
- Remodelling: A simple way to appeal to a wider range of tenants is to change the number (or layout) of rooms in your property. Bedrooms can be an especially limiting factor. Consider adding an additional room to appeal to a larger family and increase your tenant pool.
Review your Property Management
Regularly reviewing your property management processes, whether self-managed or through a property manager, is an absolute must. A property manager working on your behalf is responsible for taking the management burdens away from you.
If you find you’re constantly needing to ask for updates, or are often dealing with issues directly, it may be time to think about a change. Another good metric is the vacancy rate for your investment property. A good property manager should help make a return on your investment by keeping the property occupied.
While employing a property manager can offer many advantages, if you don’t feel they’re doing their job or producing the results you want, it could be time for a change. Choosing to manage the property yourself can save you additional fees and keep you in control.