How Adding Appeal Can Achieve Maximum Rental Return
What does it mean to achieve maximum rental return? If you're a first-time property investor, what you need to know is that there are steps you can take to maximise you rent while avoiding lower vacancy rates. Adding appeal means making changes or introducing new features that will make tenants willing to pay more.
There are key areas of improvements you can focus on that don't cost a fortune and will increase tenant demand.
This feature is sought after by most Australians, especially in the summer months. If your property is in one of the southern states, tenants will also be looking for heating in the cooler months. So you may install an air conditioning unit or provide temperature control for the property. Normally, tenants are willing to pay between $10 to $15 more per week for a property that offers reliable temperature control. Installing a unit can cost you approximately $3000, but it can be paid off in as little as four years. The installation of an air conditioning unit also comes with tax benefits. You'll be able to depreciate the cost of the capital asset and claim the cost of servicing and maintaining the air conditioning unit.
As you know, first impressions matter and a poorly presented property can actually detract from you achieving the highest possible return. Adding appeal is about attracting the best quality tenants and increasing the number of applicants, ultimately giving you more options.
Think about the things you keep an eye out for in your own home when expecting first-time guests. Ideally, your space must be clean and tidy. Stains, flaking paint and worn carpeting should be taken care of. Remember, this property is your investment and if you want it working as hard as it can for you, regular maintenance can only be beneficial.
Furnished or unfurnished? This is one of the most frequent questions asked by first-time property owners. There is no definite answer. Both have their advantages and disadvantages and depend on your target market and its demands.
A furnished property demands a higher rent, which tenants are often prepared to pay, particularly if it's close to a university, hospital or CBD. However, demand for unfurnished accommodations remains higher because a larger percentage of the market, with their own furniture, is seeking longer term accommodation. Conclusively, unfurnished properties attract longer tenancies.
Furnished properties attract transient types of tenants because they only need the property for a certain period, such as for study or for work.
If you decide to furnish your property, style it in a way that is attractive to your target market. For example, if you're property is near a university, furnishing it with study desks is probably a good idea. Regardless, always be sure to equip your property with the essentials, including kitchenware and cooking equipment.
Wardrobes, cupboards, shelves, storage cages-these are forms of storage that can decidedly impact your rental return. Storage is high in demand, especially in apartment living. If your property is lacking in storage space, see if there's potential to add these.