If you have an investment property, you want to maximise your rental return. You may need to become more proactive to do so, but your conscientiousness will pay dividends. These are seven of the best ways to maximise your rental return. 1. Renovate When you buy an older property, it may need some renovations. Do […]
No landlord wants to sit on a vacant property. What is the secret to keeping a property occupied? It starts with a common sense approach to renting. Imagine you’re the one looking for a rental property. What are you looking for? Here are some tips to reduce the risk of vacancy and keep tenants longer.
When buying to let, choose the property you purchase wisely
Some things can make it difficult to keep a rental property rented. One of them is an oversupply of rentals in an area. This is just one of many reasons why you should find out what the vacancy rate is in an area where you’re thinking of buying. If it’s high, it’s probably a good idea to look somewhere else.
Statistics show that vacancy rates are often higher on noisy, busy roads, so look for a property that’s close to amenities but far enough away from main thoroughfares for it to be a quiet location.
Tenants don’t want to live in an area where they are at a distance from the amenities they need. These will include public transportation links, shopping centres, schools and hospitals. Look for a property that has all of these amenities nearby and is within reach of public transportation.
Statistics show that vacancy rates are often higher on noisy, busy roads. Look for a property that is close to a main road, but far enough away to be in a quiet location. Tenants generally look for areas where they feel they can come home and relax. They look for homes and apartments away from busy roads.
Rental property repairs and renovations
Do whatever renovations you need to do to make your property look clean, attractive and tidy. When prospective tenants look at a property, they want to imagine themselves living comfortably in it. Painting the interior and exterior if needed is a good start, but don’t stop there. A clean, freshly painted property will attract better tenants and higher rentals.
If you have carpeting, clean it before you rent your property. If you have timber floors, they should look like they have been taken care of. No one will want to pay for a rental that has worn looking floors and that includes vinyl or laminate floors. All the floors in the house or apartment should look clean and new. If the floors are badly worn, prospective tenants will wonder what else is wrong with the property.
Take a good look at your blinds and curtains. They should be clean and in good working order. If the curtains are worn, stained or faded, it may be time to replace them. If you have blinds that look worn, replace those, too. Also look at your fly screens. If they are sagging, you may be able to repair them. If they are torn, replace them.
The kitchen and bathroom should be in good condition. Thoroughly clean them both and replace or repair anything that is worn looking. Rather than spending too much money on renovating the kitchen and bathroom, you may be able to give them a makeover by painting the walls and cupboard doors. If drawers are sticking and doors sagging, replace the drawer runners and hinges.
If you are renting a house, the front and back yards should look well-kept. Make sure there are no weeds in the lawn and prune bushes and trees. If there is a patio and pavers, think about pressure cleaning the pavers to remove dirt and grime. It’s also a good idea to plant some flowering plants in the yard. Everybody likes to see colour in the yard and flowers say the landlord takes care of the property.
Tenants like to feel safe in their homes and apartments. It’s a good idea to invest in a security screen for the front door. Smoke alarms are required by law. They should be in good working order, with new batteries. If the smoke alarm or alarms are old, think about replacing them.
Vacancy rates increase over time
Studies have shown that the longer a rental property is on the market, the harder it is to rent. In general, interest in a property is greatest within a few days of its becoming available. After two weeks, interest wanes and it can be difficult to rent the property.
If you’ve taken the steps above and made a rental property clean and tidy, it should attract good tenants who are willing to spend a little more on the property. The key word is “little.” Find out what similar properties in the area are renting for and don’t ask for more than market value. Yours isn’t the only rental property prospective tenants will be looking at. If they find a similar property for less money, they will probably take it.
Keep in mind that asking even $10 to $20 per week more than market value will make it harder to rent a property. There are 52 weeks in a year, so every week a property stays vacant reduces your rental income by almost 2 per cent.
Since interest wanes after two weeks, you could be facing a serious financial shortfall if you ask for more than market value. It may be wise to set your rental rate a little lower than average to attract tenants. Even a small amount less than another property is enough to make a tenant choose your property over another.
If you have a “no pets” policy, you may miss out on long term tenants. If you allow pets, tenants may stay longer because they know finding rentals that allow pets can be difficult. If the pets are well behaved, they won’t cause problems and you can always clean up pet dander and pet smells when the tenants move out.
How to decrease the risk of vacancy after a tenant gives notice to vacate
Tenants are generally required to give notice to vacate before they move out, and depending on the reason, the end date of the lease, lease terms and state legislation, this time frame can change.
Generally in Australia the period of notice is between 14 and 28 days, and if notifying by mail, adding on extra days for postage. To find the notice timeframe that applies to your region and your tenant’s situation, you can refer to the information on tenancy agreements by state below:
- Consumer Affairs Victoria
- New South Wales Fair Trading
- Tenants act Australian Capital Territory
- Residential Tenancies Authority Queensland
- Consumer Protection Western Australia
- Consumer Affairs Tasmania
- Consumer Affairs Northern Territory
- Information and Services for South Australians
So if a tenant gives notice, when should you start advertising the property?
Most landlords and property managers would say immediately. Landlords and agencies should have photographs of the property that they can use to advertise it, but when it comes to showing the property to prospective tenants while it is still occupied, the water can get a bit murky.
Some tenants keep their homes or apartments clean and tidy and they may also understand you don’t want the property to be vacant and will be willing to allow prospective tenants to inspect the property. So in this case, give them advance notice and don’t expect them to be on hand every day to show the property.
Legally you must give your tenant reasonable notice in writing if you’d like to show your property to prospective tenants before the current tenants vacate. There are certain times where you can show the property as well, generally speaking, between 8am-6pm Monday to Friday and 9am-5pm on a Saturday.
When it comes to deciphering ‘reasonable notice’, there’s no law that outlines what ‘reasonable’ is, so use your best judgement and try not to unnecessarily inconvenience your tenants.
Again, do your research to understand the legislation that applies to your state. If you have a property manager looking after your property, they will be able to handle all of this for you.
What if you have tenants who aren’t exactly the tidiest? Well, use your best judgment, as you don’t really want to show a property that is cluttered and untidy.
You also don’t want to show a property if the tenant visibly resents having to show the property. In a case like this, be ready to clean the property on the day the tenant moves out. At the very least, you’ll want to make sure it is advertised so people will come as soon as possible to inspect the property.
Can a property manager help reduce vacancy rates?
A property manager may be able to reduce vacancy rates in several ways. One way they can do this is by bridging the gap when a tenant gives notice they are leaving. A good property manager will know your property is going to be vacant and can tell prospective tenants your property will be available in 30 or 60 days. In many cases, a potential tenant will also have given notice and will be looking for a new place in the same or a similar amount of time.
A good property manager will also look into a tenant’s background. They will be able to find good tenants who pay their rent on time and keep a property tidy. A property manager may be able to find a long term tenant. As a landlord, you may not have the time or skill needed to find a good long term tenant.
As a landlord, you probably also have a day job. What will you do if an emergency arises while you’re at work? Urgent repairs must be carried out within 24 to 48 hours. The sooner they are carried out, the better relations you will have with your tenant. If you’re working, you may not have time to arrange urgent repairs.
Repairs that are not urgent give you more breathing space. They should be carried out within 14 days of notification. However, tenants appreciate it if they are carried out sooner. A property manager is there to handle both urgent and non-urgent repairs quickly and efficiently.
A property manager will cost money, but it can be money well spent. Look for a property manager that charges a flat rate, such as Leasi. Some property managers charge extra for things that are part of their routine duties and you never know how much you will have to pay them per month.
Read Leasi’s Fair Pricing policy and compare Leasi’s rates with typical agent fees. And don’t forget you can claim the cost of a property manager on your income tax return.