As an experienced property investor, your focus is undoubtedly on driving the greatest returns from your investment in order to achieve your longer-term financial goals.
This guide has been created in conjunction with our most experienced team of property managers to help give you proven insights into how to maximise your returns and drive greater results from your property investment. We look at how to conduct a property investment performance review, tips on how to add value and increase your rental returns, how to retain good tenants, what to look for in a high performing property manager and loads more.
We hope you find it useful.
Before you can look to drive greater returns from your investment you need to understand how your current portfolio is performing. In order to do this, set aside half a day or more each year to assess your property and its performance.
This ritual can help identify opportunities to both save money and to make more money.
When reviewing your property’s performance consider the following points.
For more insights read our 9 Ways to Review your Investment Performance article.
One of the key benefits of investing in property is you have the ability to make changes, that if done correctly and without over capitalisation, can help add rental appeal and long-term value to your asset.
Here is a look at some changes that can impact your investment property’s rental appeal and its potential long-term value. Keep in mind if you are making bigger changes, talk to your local McGrath Sales Agent and find out what buyers are willing to pay more for in the area.
Whilst you may not be looking to sell at the moment, planning ahead and having a property that will appeal to buyers down the track without over capitalising, makes good investment sense.
12 ways to add value to your investment property12 changes that can impact your investment property’s rental appeal and value
Before you start planning to make any changes, it’s a good idea to talk to your local property manager to understand your target market and what appeals to them.
Having this insight can help guide you on what improvements could have the biggest impact on the quality of tenants you attract, the rent you can charge and the long-term value of your investment property.
12 ways to add value to your investment property
Property managers today are highly skilled professionals that play an integral role in the success of a property investment.
A high performing property manager will help their clients across a number of key areas including the following.
For more information read our 8 Ways Property Managers Add Value to a Property Investment article.
Property managers are skilled at assessing individual properties, its features and location and reviewing comparable rental properties to determine a market competitive rent.
They are also aware of what local renters want and importantly what they are prepared to pay more for. Having these insights is very valuable for an investor.
To find out more about adding value to your investment, download our How to Maximise your Property Investment Guide including a chapter on 10 ways to add value to your investment.
Property Managers know the local market and they know how best to position and advertise a property to drive maximum interest. The more people who want to rent your property the better as it gives you greater opportunity to find the ideal tenant. Plus, they undoubtedly have a database of potential renters looking for a place just like yours to call home, so you may be able to rent your property faster.
Property managers are skilled at screening tenants, those who will stay for the long term and cause few, if any problems. Not many investors have this skill, and it’s usually acquired only after some bitter experiences.
Nothing will zap your profits faster than vacancies, so having someone managing tenant concerns and addressing maintenance issues on your behalf in a timely manner, can help ensure tenants are happy and vacancies are limited. Plus, property managers have a team of maintenance specialists who can be mobilised quickly and economically into action, to fix any maintenance issues.
For more information read our Practical Ways to Attract and Retain Good Tenants article.
To ensure you are maximising the tax effectiveness of your property, you need to ensure your financial records are in order.
Property managers can be a huge help here and can provide you with a fully itemised statement each month, along with a comprehensive rental statement at the conclusion of each financial year for you to give to your accountant.
A high performing property manager will conduct regular inspections of your property to ensure the investment is being cared for and nothing untoward is happening on the premises. These inspections also ensure landlords are able to actively monitor and address any maintenance or health and safety issues.
Property managers with their tried and tested systems are highly efficient at working to ensure rent is collected on time. They also have strong rental arrears procedures that they are skilled at implementing should a tenant fall behind. Having an independent property manager look after this can help save landlords a lot of stress and a lot of time.
For information on what rent to charge read our How Much is my Property Worth to Rent article.
Landlords have a legal obligation to comply with the regulations set out in their relevant Landlord-Tenant Law. This documents interactions, rights and obligations of both landlords and tenants. In addition, landlords are obliged to comply with local state and regional legislations and not doing so can have serious implications for the property owner.
Property managers stay up to date with the changes and can help keep their landlords informed.
In most cases property management fees are tax deductible. So, in reality landlords are able to access all of the benefits offered by property managers and then offset their costs against their tax. Of course, talk to your accountant about your property and specific tax situation.
To find your local McGrath Property Manager and understand how they can help you add value to your investment and keep you on track to achieve your investment goals, click here.
Stable tenants who look after your property and pay their rent on time are incredibly valuable to an investor and undoubtedly a key priority for you. By retaining good tenants, you don’t need to spend money on advertising for new ones, nor worry about how a vacancy may impact your investment loan obligations.
But what can you do to keep your tenants happy?
How to Maximise your Property Investment GuideSetting realistic expectations and time frames to address issues as they arise during a tenancy is critical. If tenants understand how quickly maintenance issues will be addressed, when to expect an email response from the property manager, how often the property will be inspected etc, it paves the way for a smoother relationship.
Address any issues as per the agreed timelinesIf issues arise during the tenancy ensuring you or property manager act within the agreed timeframe helps instil trust between you and your tenant.
Conduct regular inspectionsBy conducting regular inspections (approx 2-4 per year) it not only enables you to keep an eye on the property so you can proactively address any issues, it also provides opportunities for the tenants to communicate openly with or your property manager - helping to create a stronger working relationship.
If your property allows pets, offering this as an option for tenants can be very popular. Tenants are often keen to sign longer leases and pay slightly more rent if they are able to have their furry friends with them. Of course, ensure both you and your tenants sign a pet policy and check with your body corporate to ensure pets are permitted before offering this.
Only make small rental increasesIf you are looking to increase the rent, it’s advisable to only make small increases and to ensure you understand the legislation in your State or Territory with respect to how often this can be done and the notice periods required.
Be a bit flexibleMaintaining a degree of flexibility with good tenants can help keep them happy. From time to time, requests are made by tenants, such as small alterations to the property that will not impact the value of the property or may increase the value of the property. Being prepared to be flexible when these requests can help with tenant retention.
If you have great tenants, consider offering them an incentive to stay. Popular incentives include offering a gardener, adding appliances such as a dishwasher etc. Talk to your property manager about what might work here for your tenants.
Ask them to renew their leaseIf you’re happy with your tenants, let them know and before the lease ends ask them if they’d like to sign another lease. To make it more appealing, perhaps offer an incentive for them to re-sign.
Practical ways to attract and retain good tenants
Given the significant role your property manager plays, ensuring you partner with a high performing one is important. But how can you assess your current property manager to determine if they are the best one for you and your investment?
Finding the right property manager is important for your investment’s success but what qualities should you look for? Here are the key qualities that we believe define a high performing property manager.
Now you know the qualities to look for, here are a series of questions to ask your shortlisted property managers to help you find the right one to join your investment team.
As in investor staying informed about what is happening across the Australian real estate market is important. To help you understand the latest property trends, how the real estate market is performing across the East Coast and where John McGrath see’s the next property hotspots, download our annual McGrath Report with the link below.
The McGrath Report 2021