5 Min Read.
5 Min Read.
As time goes by, the cost of living goes up. The same can be said for maintaining a rental property. Finding ways to increase your rental income becomes essential when you start covering the costs of maintaining a house. The cost of maintenance services and even local council rates can steadily increase over the years.
Essential maintenance such as plumbing, electrical or roof restoration works can all increase in cost thanks to labour and the materials being used. To accommodate for rising maintenance costs, it’s easy to gradually increase the property’s rent. But a rent increase doesn’t always sit well with current or potentially new tenants. Does your property become more desirable after a rent increase? What benefits do tenants get from a rate increase?
If you want to justify a rent increase, then consider making more improvements to your investment property. Renovating your property can add incredible value to it. Think of the value an extra bedroom, bathroom, or study would add to your property. Ducted heating, solar panels, off-street parking are just some of the features that can make your property more desirable among potential tenants.
To help you find new ways to increase your rental income here are six tips to get you started.
Is your investment property stuck in a time warp? Pink wall paint, green carpets, and floral print wallpaper have all had their heyday. And who knows? Maybe they will come back into fashion. Until then, it’s time to let go and reinvigorate the look of your investment property!
Rip off that retro wallpaper and add new colours of paint to the walls. New colours can instantly modernise the look and feel of a home. Remove any old and musty carpet from the property and you may discover some pristine timber flooring. Give the floorboards a good sand and polish to make every walkway and living space look tidier.
In some cases, you may have enough space on your property’s land for renovations. Sought after items like an additional bathroom or master bedroom are just two eye-catching features you could add. Knock out a few walls and you might have the potential to create a spacious kitchen and entertaining area. For inspiration and ideas, put yourself in the headspace of young families today. Consider today’s most wanted house features when you’re thinking of new ways to increase your rental income.
You may be surprised to see what you’re missing out on when tax time rolls around. Before you lodge your next tax return, speak to a tax accountant that specialises in property investment. They might be able to find extra items you can claim tax on. You could potentially be saving thousands on the cost of maintaining your investment property.
Bank charges, body corporate fees, and insurance are just some of the items you could be claiming tax on. You might also be able to claim on maintenance services such as structural repairs, renovations, cleaning and gardening services.
Furnished properties tend to attract a higher yield. Unfortunately, the downside is they can attract a high turnover of tenants. Brett Ribarsky from Property Managers Melbourne explains that furnished properties are likely to be more appealing for two major groups; corporate clients and international students.
Fully furnished apartments are highly sought after by international students due to their low maintenance requirements. With everything set up for them already, an international student can arrive at their fully furnished property without the need for a fit-out. This makes the transition to a new country and residence far easier than most other options. The same can be said for a corporate client on a temporary 6 or 12 month contract.
International students tend to be a high turnover tenant thanks to their studying habits. Some students only stay until their course is complete. This could be anything from one to three years. Just be wary before your tenant’s study period is up. If they leave at the end of a semester, there could be an entire holiday period from four months (November to March) of no rent being paid until a new tenant comes along.
The more in-demand features your apartment has, the more wanted your property will be. Getting one of these wanted features is another one of those great ways to increase your rental income. Off-street parking and storage space are two of the most sought after features you’ll find amongst tenants looking for an apartment.
With limited room in an apartment, extra storage space is always going to be a highly desirable feature. Extra storage space usually comes in the form of a storage locker located next to an apartment’s designated car park. This storage is often used for items such as a bicycle that many would prefer to store outside of their apartment.
Off-street parking is another gem that will have tenants eyeing off your investment property. Particularly in outer city suburbs, curbside parking can be time-restricted or expensive to use. Off-street parking offers a fantastic lifestyle option for potential tenants who would otherwise have to rely on public transport or ridesharing services to get around their local neighbourhood.
Look around at new property estates and you’ll discover plenty of potential for ways to increase your rental income. One of the best outcomes of buying a newly-built home is the reduction in maintenance costs. A newly built property from a house and land package shouldn’t require any hefty maintenance costs for at least the first ten years.
As always, do your research when purchasing a new property. Especially one from a new estate. Make sure there’s a healthy interest in rental properties for the area. Also, ensure you’re relying on a premium builder for your new home. Check the reputation of the builder and see what the condition of their nearby houses is like.
Renting each room of a house is one of the most effective ways to increase your rental income. This strategy tends to work well when you have the right mix of tenants and location. But you will need a sustained interest in your property if you want tenants moving in after previous ones move out.
A perfect example of using this strategy is when you rent out a property near a university. When your property is near a campus, there’s a high chance you’ll get a sustained interest from students looking to move into that suburb. Most university courses can take anywhere from two to five years to complete. So there’s a good chance you’ll get long-term tenants if they’re happy with the property.
The potential for increasing your rental income is hard to ignore when you’re renting by the room. Consider the following scenario. You have a 4-bedroom house and the average rent for that area is $350 a week. You could get around this by renting each room for $120 a week. This would enable you to get a total of $480 per week. Before you commit to this strategy, make sure your local council allows it. Check if any boarding house regulations apply to your investment property’s suburb.