Each time a tenant vacates, you have the opportunity to assess whether you can quickly add value to your investment and still be competitive with a higher rent.
Always consult your Property Manager about the most cost-effective improvements but consider:
Window Coverings. Nothing lifts the appearance of a property more quickly than the installation of new blinds, curtains or plantation shutters. Tenants far prefer homes fitted with window coverings and plantation shutters, in particular, are hard wearing and add substantially to the perception of value.
Fencing. Fencing your property not only improves security, it makes the home more appealing to tenants with pets. Over 60% of Australian households own a pet so you immediately broaden your pool of potential tenants.
New Oven/Stove. If your property has a freestanding oven/stove, is it in need of replacement? Many appliance suppliers will deliver, install and take away your old cooker all for the one price. A shiny, modern new cooker instantly makes your property so much more appealing and more valuable.
Built in wardrobes. Built-ins make your rental property infinitely more appealing than a property with no storage. They’re quick to install, inexpensive and put your property streets ahead of competitors without wardrobes.
Dishwasher. Have you got an empty space where a dishwasher should be in your kitchen? Many suppliers include installation in the purchase price and a dishwasher means living in your property will be so much more convenient. Better still, dishwashers start from as little as about $600 so they won’t break the budget.
Lino. A new lino floor is inexpensive, quick to install, and dramatically improves appeal.
With different tenancy laws in every state of Australia, investors need quality property management services more than ever.
These 7 steps should help you hire a property manager with confidence:
Ask if comprehensive reference checks including employers, referees & previous managing agents are done with each application.
Ask if your agency uses a National Tenancy Database to check all tenant applications.
Check the agency’s reputation by conducting an online ‘reviews’ search.
Ask if you’ll have a dedicated Property Manager or will several staff manage your property.
Ask if your agency allows tenants to register their property search online, and, whether it uses tenant-matching systems to find tenants faster.
Ask whether your agency will accompany all tenants when they inspect your property.
Ask how your property will be marketed, when vacancies happen.
It’s important to understand the difference between repairs and capital improvements when it comes to tax time.
Repairs & maintenance are any work done to fix damage or deterioration in your investment property i.e. fixing a damaged fence.
Work completed to prevent deterioration is defined as maintenance i.e. servicing an air conditioner.
Repairs and maintenance expenses can be claimed as a tax deduction within the current financial year.
Capital improvements improve the condition or value of an item beyond its original state at the time of purchase. They can be depreciated or claimed as capital works deductions over time.
Examples of capital works are structural additions, adding or extending a wall, or adding items that are fixed and cannot be easily removed.
A tax depreciation schedule, prepared by a professional tax specialist, will assure you maximise your investment property’s tax deductions and keep out of trouble with the Australian Taxation Office.
Investment property owners should ensure they keep proper accounting records and plan ahead for next year’s tax return.
80 per cent of property investors fail to take full advantage of the tax benefits of owning an investment property.
Many investors don’t realise that regardless of whether they have spent any money on their property, the wear and tear on their asset and its fixtures, can be offset against any income they earn from the property. Property depreciation is a non-cash deduction available to income producing properties and can be claimed on both positively geared and negatively geared properties.
Tax benefits associated with negative gearing can sometimes be equivalent to 60 per cent of the total purchase price of a property.
Even decorative garden sculptures, common areas in an apartment building, tree houses or recreational facilities may be legitimately claimed.
Other costs that the ATO allows to be deducted include interest costs, maintenance expenses and holding costs such as building insurance and rates.
Establishing a Depreciation Schedule from the outset ensures all expenses and items are deducted to their full capacity.
Investors always look for the greatest return on their investment, and the best place to start is by securing the services and advice of a professional.
First National agents have the local knowledge and experience, supported by our leading edge technologies, to ensure they provide the right and most appropriate advice on property and property management.
We also have access to a range of experts associated with property management, such as BMT, so clients can enjoy all the benefits of property ownership.
The constantly changing ATO rules make it essential for investors to use competent depreciation companies, like BMT, to undertake an onsite inspection of their property. Desktop estimates no longer suffice.
Renovating a property can pay dividends, but you owe it to yourself and your wallet to make sure whatever projects you undertake offer a high return on investment, says First National Real Estate.
A new coat of paint, built-in wardrobes and replacing carpet with hardwood floors may make a home more attractive to renters and buyers, but not all renovations are created equal.
Focus on kitchens and bathrooms
An open plan living room may set prospective buyers to salivating, but kitchens and bathrooms tend to be of greater importance. This means it can pay off big to update your kitchen and bathrooms with new fixtures and appliances.
Of course, completely redoing a kitchen or bathroom can be an expensive endeavour, so don’t gut a space if a simple facelift will do. Upgrading appliances, installing new lighting fixtures and refinishing surfaces can go a long way.
Avoid high-price items
A swimming pool may be a luxurious and sought-after amenity, but it very rarely equals a significant return on investment.
Firstly, installing a swimming pool will cost you plenty. Secondly, many home buyers are simply unwilling to pay the extra costs that come with maintaining a swimming pool. For every buyer a pool might attract, many more may be turned off by it.
Also keep in mind the safety issues and higher insurance premiums that often come with swimming pools.
Appeal to a wide variety
Renovations can be a great way to express your personal tastes and passions, but remember that renovations that maximise return should appeal to the largest number of potential renters and buyers possible.
This means avoiding design choices that may turn off most people even if they please you. Changes and styles that last and appeal to a wide variety of people are a much better investment than singular renovations that might age poorly.
Renting out a home can be a great way to increase your income while investing in a valuable asset.
However, just as important as finding the right tenants for your property is holding on to them. Having disruptions in tenancy can not only cost you money, it can be a stressful and time-consuming problem.
Quality tenants will provide you with regular income, as well as help to keep your investment in good condition.
With this in mind, there are many strategies you can use to make sure your tenants remain yours.
At the end of the day, your rental home belongs to you. However, renters do not want to feel like they’re living at the whims of their landlord, especially when it comes to privacy. By making sure you do all you can to give your tenants privacy, you will help them to feel like they’re living in a proper home, not just a temporary abode.
The best way to do this is to give proper notice before dropping by the property, as well as not overdoing it with your visits.
Just as important as knowing when to leave your tenants alone is knowing when to put them at the forefront of your mind.
Things like needed repairs should be taken care of as soon as possible. Simply telling your tenants that you’ll take care of a problem isn’t the same as following through on it, so when it comes to inevitable issues like fixing or replacing things in the home, do your best to be attentive and responsive.
In many ways, a good tenant is like a good employee. After all, your income depends on them, and if they’ve shown themselves trustworthy and respectful toward your property, it can pay off to show your appreciation much in the same way an employer would.
Obviously offering raises and vacation time isn’t in your power, but small gestures like notes of appreciation and gifts during the holiday season can not only show your gratitude, they can help to create a bond of loyalty between you and your tenant that will keep them around longer.
Performing a few renovations here and there can even help you to add some value to your home or investment property - an important step if you're thinking of selling soon!
Here are three budget renovations you might want to think about:
Refresh and repaint
Have you ever walked through your home and spotted countless chips, scratches and marks on your walls and ceilings? Perhaps your wallpaper has begun to peel or mould has gotten the better of your bathroom paint?
A few licks of paint throughout your home can do wonders. It's also an inexpensive and creative way to make your home look new again. Repaint cupboards, walls, ceilings and drawers to freshen up the interior of your home.
Tidy up the backyard
Green thumb or not, it's easy to get right into your backyard and give it a makeover. All you will need are some gardening tools, a few helping hands and a skip to tidy up your backyard and get it looking neat and tidy.
Topsoil, bark and plants are cheap additions to your backyard and can turn your garden from an overgrown patch into a manicured entertainer's paradise.
While you're at it, why not re-stain and refurbish some of your neglected outdoor furniture?
Replace fixtures and fittings
Have a look at the most-used items in your home and determine whether they're in need of replacement. Items such as taps, door handles, wall switches and light fittings can all easily become worn down over time due to overuse.
However, they're also not that expensive to replace. You might want to update some of these to ensure they tie in with the new decor in your home and are more functional.
Remember, DIY renovations require you to stick to a strict budget. Always keep this in mind when you're purchasing tools or hiring extra help.
If you're searching for an easy and relatively inexpensive way of adding value and appeal to your home, then look no further than your own backyard.
By putting a few hours and some hard work into your outdoor space, you can enhance the aesthetic appeal of your home or create a functioning vegetable garden. This can go a long way towards improving appeal, especially when you've placed your home on the market.
However, one of the questions many people ponder is whether to have a potted or garden bed. Each option has its own pros and cons, but it's ultimately dependent on the size of your backyard and how much time you're willing to put into caring for it.
One of the biggest perks of installing a potted garden is that they are easily removable.
This means they can be moved around into sun or shade, and are also a great option for renters who wish to take their plants with them when they move.
Potted gardens are the best choice for those with limited land size, such as people living in apartments, townhouses or units.
However, this type of garden needs a lot of regular watering, as the pots can dry out quite quickly.
If you have the space for it, a garden bed can be a great addition to your home. You can get creative with shapes and sizes, or even consider installing a vegetable garden to take advantage of the rich soil.
Digging up your own garden can be slightly cheaper than a potted one, as you won't have to buy potting mix, tubs or planter boxes. They're also better at retaining water, as they're directly in the ground.
You can also use compost in your garden beds, which gives your plants added nutrients while they're growing.
Garden beds require a lot of maintenance, as you'll regularly need to weed them or top up the mulch. Otherwise, you might face unsightly overgrown weeds popping up here, there and everywhere!
Remember that both options - potted or not - need some sort of regular maintenance. Be sure you can put the time and effort in to keep your garden looking great.
Many people choose to invest in property because it is a great tactic to build wealth and secure their futures financially. However, as it's an investment, owners should look for ways to maximise the returns on their properties. First National property managers always do.
If you're looking for strategies to get the most out of your rental property, here are three tips to help you on your way.
Hire a professional
Have you ever had to bang on a tenant's door to pick up missed rent? Has your phone gone off at midnight after a tenant's hot water cylinder has burst for the third time this year?
Managing your own rental property can be a difficult task, especially if you have a vast portfolio. Instead of trying to juggle multiple properties at once, enlist the help of a professional property manager to take a few off your hands.
Property managers have the knowledge, time and skill to ensure your investments and tenants are taken care of.
Review your rent
It may have been years since you last reviewed the price you're charging for your rental property.
The important thing to remember is that the market can change quite often. Fluctuations in vacancy rates and median rents can all impact how much you can charge for your property, and you may end up charging too little.
Review your rent on a regular basis to meet the market. Compare your home with other rentals similar to your property, or obtain a rent appraisal from an agent.
Regularly refresh your rental property
The key to ensuring your rental property remains tenanted is to keep it in good condition. By staying on top of maintenance issues and refreshing the interior, your investment can be kept looking great for longer.
At the end of each tenancy, you might want to give the home a quick lick of paint, have the carpets cleaned and the garden reworked. You might even be able to charge a bit extra for rent, while also making your home look more appealing to tenants.
A splash of colour can make a world of difference, transforming a boring room into a space you and your guests will want to spend time in. Of course, as with most things in life, a little moderation can also go a long way.
When selecting interior paint colours, it's important to walk the line between self-expression and how your design choices can impact your home's value in the future.
Paint is part of a whole
Before choosing a colour, keep in mind that the paint on your walls doesn't exist in a vacuum. It will interact with everything from your floor to your furniture, so try to have a general mood or design scheme in mind before opting for a colour.
After all, a gorgeous sea foam green won't do you much good if it clashes with your wallpaper, carpeting or couch.
The size of a room has a lot to do with the types of colours you should choose. Darker colours can make a space seem smaller, while lighter colours have the opposite effect. Keep this in mind when selecting a shade.
Heat up or cool off
Different colours also offer different feelings. Reds, yellows and browns can make a room feel warmer and more cosy, while blues, greens and violets provide a cooler, breezier feel.
Sometimes a single wall can do more to set a room apart than painting every wall the same colour. The same holds true for doorjambs and window frames. Sometimes less is more, especially if the colour chosen is particularly loud.
Look to the future
You should use paint colour selections as a way to express yourself and your tastes, but keep in mind how this might affect the resale value of your home down the line. Not everyone will be crazy about a zebra-print ceiling, after all.