Maximising rental income in a turbulent market
Boosting rental returns is currently a key issue for owners and managers of rental properties, particularly in cities like Perth and Darwin where vacancies are on the rise.
While cities like Melbourne, Canberra and Hobart are running against the vacancy trend, their western and northern counterparts have seen vacancy rates jump relatively quickly.
Real Estate Institute of WA President, David Airey, told ABC radio recently there were nearly two and a half thousand more rental properties vacant (8,147 in June 2015 compared with 5,827 in June 2014) and the vacancy rate had jumped to 4.9 per cent in Western Australia.
Mr Airey said there were currently 20,000 dwellings under construction in Western Australia, 7,000 of them apartments.
With these statistics threatening to increase rental vacancies further, there are steps that can be taken to maximise returns on rental properties in tenant-driven markets.
According to Sharon Fox-Slater, Executive General Manager, RentCover, keeping properties in good order was essential but adding extras often sealed the deal for tenants.
“Giving your property the edge with extra features such as increased security will not only make it more appealing to tenants, it can have the added bonus of reducing your insurance costs,” she said.
“Inclusions, such as screen doors and window locks are a great start, and if the property has a carport, look at installing a garage door for that extra level of security.”
Creature comforts and mod cons were also high on the list for many renters, many of whom worked long hours and expected maximum convenience from their homes.
“Reverse-cycle air-conditioning and dishwashers are no longer luxury items. They’re now considered essential and if your property does not have them it may take longer to rent,” Ms Fox-Slater said.
Keeping the exterior of properties, and particularly the surrounding gardens, attractive were also key factors in boosting rental returns.
“Dead gardens really impact on the appeal of rental properties and can even reflect badly on neighbouring homes,” Ms Fox-Slater added.
“Maintaining gardens and outdoor areas can be as simple as employing a regular gardener to make sure outdoor areas remain green and clean.
“It is well worth the extra expense and you can, of course, factor those costs into the rent as you would with other maintenance work.
“You may also want to consider allowing pets. Not only will this open up your property to many more tenants, most will be happy to pay a higher rent to keep their dogs and cats with them.”
Read more from The RentCover Report July: