16 Jun 9 Ways To Increase Your Rental Income
Of course when investing in property, you want to maximize your yield. But how exactly can you do that? At Property Managers Melb, we look at 9 ways to increase your rental income
1. Increasing the rent
If it has been a while since you last increased the rent, speak to your property manager about getting a rental review. You may find you are undercharging.
2. Decreasing the rent
If you are having trouble leasing the property, speak to your property manager about what price they would suggest to be slightly below market value. Any gains you get through over charging on your rent is likely outweighed by a few weeks of lost income due to vacancy because to property is too expensive.
Speak to a mortgage broker to see if there is another lender out there that could offer you a lower finance rate. Alternative, make an appointment to speak to your own lender about whether that could lower your finance rate. They might be more accommodating if you have a large loan, or if it’s clear they will loose your business.
4. Switching to interest-only
An easy way to increase your incomings is to reduce your loan to interest only as it reduces the size of the payments.
5. Maximizing tax deductions
Make sure you’re maximizing your deductions by speaking to a tax accountant who specializes in property investment. They might be able to shed some light on extra things you can claim like bank charges, body corporate, insurance, land tax, legal costs, repairs, cleaning, council rates and advertisement. There are something’s which you are able to claim over long periods including capital works, borrowing expenses and the declining value of depreciating assets.
6. Make a depreciation schedule
Depreciation benefits can be claimed on both newer and older properties. Quantity surveyors can provide a depreciation schedule so you guarantee you’re maximizing your claim.
7. Buying a low maintenance property
Newer homes tend to require less maintenance, which means you don’t need to worry as much about the constant repairs and improvements older homes require.
8. Rent your property furnished
Betty Ribarsky from Property Managers Melb explains that furnished properties appeal to a very niche market. Either corporate clients (properties within the CBD), or international students (properties close to universities and transport). Furnished properties can attract a higher yield, but also attract a high turn over which means you’ll need to budget to afford a higher than normal vacancy rate.
9. Rent by the room
Renting by the room is a strategy which might work well depending on the location and clientele. If you had a 4 bedroom house for example, and the market said an appropriate rent would be $350 a week, you could get around this buy renting each room for $120 a week. Thus, you get $480 per week. This would work well if your property was close to a university. Check with local universities about advertising through their website or noticeboards on campus. Also, find out if any laws, such as boarding house regulations, would apply to your property if you rent it out by the room.