How to Maximise the Potential of Your Investment Property Here are 5 ways to maximise your rental income that I’ve learned over the years from managing hundreds of properties through our property management department: Sharing - this is one of my articles to my own database. 1. Keep Your Property Updated Tenants will pay a premium for properties that feel fresh and clean. You do not need to have the latest modern appliances nor do you need to do a complete renovation. Consider painting, replacing worn out or stained carpets and replacing blinds and curtains. These are cosmetic changes that can really lift the property, increase competition amongst tenants and achieve a higher rent. 2. Long term leases Six month leases can be beneficial in some circumstances but where appropriate go for a 12 month lease. This will ensure a longer commitment from tenants and uninterrupted cash flow. 3. Minimal or ZERO vacancies The best time to show prospective tenants through a rental property is when other tenants are still paying the rent. If your current tenants are not renewing their fixed term lease they need to give you 28 days notice or 21 days notice for a periodic lease agreement. Use this time to advertise the property for rent, show prospective tenants through the property and, where appropriate, carefully coordinate the move in date of one tenant with the move out date of the existing tenant so that there are zero or close to zero vacancies. 4. Consider Pets With 56% of Australians having pets and 25% considering getting one in the future, that’s a huge market of potential tenants to tap into. If your property is pet friendly you have the potential to achieve premium rent and lower vacancies as pet owners are willing to pay premium rent to keep their furry family members with them. Please ensure that your property manager has a pet clause in the lease to protect your interest. My experience is that responsible people remain responsible even if they have a pet and irresponsible people will continue to be irresponsible whether they have pets or not. With so many pet owners applying for properties, sometimes not allowing pets can be a very costly and risky opinion to have as it really reduces your market. 5. Proactive Property Management A proactive manager notices a water leak in the bathroom vanity and gets it fixed. Tenants report that the front lock no longer works and she will have someone there to rectify the problem immediately minimising your risk of security breach with the tenants. A proactive property manager will notice that a vacate clean is required and get it done, even after hours to ensure that the property is ready for the next tenant. A reactive property manager will email you a list of problems and ask you what you want to do, he will not have quotes or solutions at hand. He will stall and procrastinate on new tenants if the property is not rent ready, he will not work after hours to get things done. The difference is huge, one will minimise your exposure to risk and tenant compensation for maintenance not being done and the other one will increase it. A proactive property manager will minimise vacancies in the property and a reactive property manager will increase them. It makes a huge difference to your bottom line. Things to Remember Keep properties unfurnished – Furnished properties are very niche, very transient, there are more vacancies and more maintenance. Unless it’s a $1200 per week executive residence with exquisite Italian decor and in a prestige suburb, keep it unfurnished. Furnishing the wrong property will deter tenants from applying as, apart from a specific niche market, most tenants want to use their own furniture. Long term leases only – short term leases create more vacancies, more costs and more letting fees if you are using an agent. Keep away from Rental guarantees – the cost is priced in and you pay for it. Never Get involved – keep at arm’s length – use a professional property manager and let them do their job. Good Property managers make you money beyond the fees they are being paid Don’t let your leases expire at quiet times of the year like around Christmas time, when signing leases in December consider a 13 or 14 month lease so they expire in January or February. Remember you don’t know everything – take feedback and advice from your trusted team of advisers, if you are the smartest person on your team then you are running an adult day care.