You can dramatically increase the property's desirability and increase the rental intake by spending some time and money on the presentation and maintenance of your property. This should provide a good return on investment in the long term.
Finding your first tenantThe first step in property management is to decide what kind of tenants you are looking for. Depending on the demographics of the suburb, it may be difficult to find your ideal tenant. As an investor, you may not be completely familiar with the area, so check the surrounding area or the demographic data of the suburb to get a better idea of what you can expect. Once you have your target demographic, you then need to make sure the property suits that tenant type.
For example, you may be looking for a couple to rent the property, but if the suburb contains mainly families in the area, you’ll need to adapt accordingly. Ideally your property will generally match the tenants that are available with only minor changes.
Factors to consider:
- Amenities - Is the property near schools or a university?
- Location - Is it close to the CBD or in the outer suburbs?
There are various tweaks or additions you can make to the property to make it more attractive for your tenant type. Think about what the target tenant would like to see in the property.
If you want to get a good rental yield and increase your chances of securing a long term tenant, you'll need to make sure the property is presented well starting from the outside. Sometimes potential tenants drive by a property and are instantly put off by the poor presentation outside. If you're not even getting any inspections inside the property, you'll need to make some drastic changes or be more realistic with then rental price.
Some improvements to you can make include:
- Have the property professionally cleaned (especially carpets). Carpets or vinyl is recommended to be replaced every 10 years.
- Giving the property a fresh coat of paint. This can completely transform the look and feel of the property. Neutral colours will appeal to the most amount of tenants.
- Repaint or repair walls if damaged
- Make sure windows are clean and open and shut correctly.
- Hinges, knobs, handles, switches and buttons all in good working order.
- Shelves emptied and cleaned unless there are added inclusions with the property (such as kitchenware)
- Drapes and curtains in good condition and working order
- No leaking taps
- Lights cleaned and working throughout the property
- Bathrooms cleaned
- Fixing any cracked tiles, ceramic etc.
- Improve the yard/garden with new plant life
- Garden weeded
- Lawns mowed
- Hose/sprinklers in working order
- Pool cleaned and in order (if applicable)
- Install ceiling fans or an air-conditioner
- Add dishwasher, washing machine and/or dryer
- Offer rooms or the property furnished or just a bed and desk
- Install flyscreens in windows that lack them
- Include stainless steel appliances for the kitchen such as microwave, toaster etc.
- Provide high-speed internet if available
- Add a fence for extra security
- Provide a BBQ if the place has a good outdoors section
- Allow pets
- Solar panels/Solar heating
- Garage with remote control
- Offering a week's free rent
Some of these will cost you money, but having a property that attracts a tenant quickly will mitigate this cost compared to the loss of rental income for an empty property.
It's better to add white goods or make other improvements instead of losing money on an empty property. The condition of the property is important and you’ll be losing more in the long run if it remains vacant.
Keeping your tenant long-term
Happy tenants are likely to stay for a long time, so it’s the property manager’s job to keep them happy. Properties in bad condition, in need of repairs or renovation are likely to send tenants in search of something better.
To keep a tenant happy you should:
- Ensure repairs made as soon as the issue is reported
- Have a property manager that can deal with and issues/confrontations amicably
- Make further improvements in the property as requested or update appliances/furnishings every couple of years
- Increase rent gradually when the market dictates and make sure it is still competitive