The Best Property Management Tips For First Time Investors
If you’re planning to buy an investment property, there are probably a flurry of questions swirling around your head. For most investors, these questions all boil down to one simple question: how can I get the most out of my property?
Jo Leonardis, Department Manager of Property Management for hockingstuart Richmond, has the answers to your biggest questions and top tips for landlords and investors looking to maximise their return.
What rent is my property worth?
While a competitive market may help rental yield, the amount you’re able to get for your investment is down to the property itself. Sure, a beautifully designed and well-kept home will bring potential tenants flocking to your inspections, but the rent itself is determined by the type of house you provide and the demand for that type of home in your chosen suburb. The number of bedrooms, bathrooms and parking spaces available will factor into the final cost you can ask for.
What type of property should I be looking for?
There’s no real hard and fast rule about the type of properties that are successful in the rental market. To maximise your rental yield you should look for homes with two or three bedrooms, where the cost of rent can be shared among more people than a one-bedroom apartment. Location will also be a factor when determining the types of properties that will give you the best yield, with inner suburbs close to public transport and the CBD likely to attract more young workers looking for a share home. Likewise, it shouldn’t matter whether the home is new or old, but unless you’re planning on doing a costly renovation, steer clear of fixer uppers or anything requiring a lot of work.
What features will add value to the rent?
If you’re looking for an investment property and want to get the most bang for your buck, there are a couple of features to keep an eye out for. An additional bathroom is always a popular feature and can increase rent by an extra $100 per week. Particularly in the inner suburbs, additional parking spaces are a rare commodity, and can increase your rental yield by up to $50 per week in some areas.
What small changes can I make to charge more for rent?
The hockingstuart property management team recommends regular upkeep of your rental property to ensure you’re always at the top of the market. You should be painting, changing the carpets and updating the blinds at least every 5 -10 years. If you have high tenant turnover and lots of wear and tear this may need to happen more frequently and can be assessed between tenants. Your property manager will be able to provide you with sound recommendations based on your property and market trends or demands.
Is it worth doing a full renovation?
If a property is incredibly rundown and uninhabitable, then a full renovation may be necessary. However, when considering a largescale renovation, it is important to weigh your budget against the potential future rental yield. If the cost of the renovation is $50,000, how long will it take you to make it back with a rent increase? In many cases you’ll discover that this solution is untenable.