Before renting out your property in Australia (whether you are moving out of the family home or you have bought an investment property), there are a number of things you should do to ensure you maximise your rental returns.
1. Attend to Minor Repairs Before Renting Out Your Property
Before renting out your property in Australia, thoroughly inspect the property for any minor problems or repairs required. There are a number of reasons why you might want to do this.
- You will attract a better tenant. If prospective tenants see lots of small problems with the house they may be disinclined to apply to rent the house.
- It is usually far cheaper to get a handyman or tradesman over to your house to do a lot of little jobs in one go, rather than be forced to deal with them individually at a later date when they become bigger problems needing attention
- You will be likely to retain your tenants longer. Nothing annoys tenants more than constantly having to contact the landlord or property manager on a regular basis to get things fixed.
2. Make Some Cosmetic Improvements
Renting a house is no different to selling a house. Your aim is to present the house in the most positive light so as to attract the highest price. Don’t underestimate how some quick and cheap cosmetic improvements before renting out your property can increase your potential rent and reduce vacancy periods.
These might include :
- fresh coat of paint on some walls, or touching up paint chips on walls
- quick garden makeover – often laying some fresh mulch makes a substantial improvement to the overall appearance of the property
- replace any tap or light fittings that make the property feel like you’ve walked back in time to the 1970s
- replacing curtains or carpets in some rooms
- anything you can do to improve street appeal of property when prospective tenants drive past
3. Get A Depreciation Report
In my article on rental property depreciation I explain in detail the benefits of depreciation. Essentially, depreciation is a tax deduction you can claim that represents the loss in value of the building and fittings of your property during the course of the year. Depending on the age, style and size of your property it may be possible to obtain in the order of $3000 to $10,000 per year in depreciation tax deductions.
In order to claim depreciation tax deductions you will require a depreciation schedule prepared by a licenced quantity surveyor. I recommend Washington Brown, and have negotiated a $55 discount when you request a report via the links on this page, or when using this application form. The cost of a depreciation schedule is usually tax deductible, and the cost will usually be made back in reduced tax in your first tax return. It is best to get this done before renting out your property, or as soon as possible after, but if you did not do this then it is never too late to obtain one.
4. Improve The Features of The Property
We usually imagine that the market rent for a house only correlates well with such features as number of bedrooms, number of bathrooms, on or off street parking, and location. These things are not easy (or cheap) to change, however there are some other aspects of a property that can have a big influence on the rent and the attractiveness of your property to prospective tenants. Here, I am thinking of things such as airconditioning, house security (security screens / doors, alarms), and dishwashers.
In particular, think about the target or ideal tenant for your property. For example, if they would expect a dishwasher in your house and it doesn’t have one, then you should consider whether that is something you can install. Also remember that you can depreciate the cost of adding these features, and obtain a larger tax deduction.
Also remember, that even if some of these features will not, on the face of it, increase your rent, will it add to the overall attractiveness of the property? The more attractive the property, the longer a tenant is likely to stay, and the smaller the vacancy periods between tenants will be. All this will result in an improved overall return on your investment.
5. Take Good Quality Photos Before Renting Out Your Property
Websites like realestate.com.au and domain.com.au are now the dominant research tools for prospective tenants finding their next home. Whether or not they decide to inspect your property is based on how your property is presented on these websites. The best way to ensure your property is presented in the best possible way is to ensure you use high quality photos. A quick review of www.realestate.com.au rentals will show you how badly some landlords market their properties.
You don’t necessarily need to use a professional photographer, but just ensure the photos you use are of a high quality. Photos that work the best are ones showing the home in a furnished and tidy state (rather than pictures of empty rooms or, even worse, with the current tenant’s dirty clothes strewn all across the floor and ugly furniture). By showing photos of a house that is neatly furnished your prospective tenants can imagine themselves living in the home. You may already have photos of your home that you can send to your property manager, or you can ask the property manager or a friend to take some good photos for you. The more photos you put on www.realestate.com.au the better.
If you are using a good property manager like Little Real Estate, then they will ensure they are presenting your home in the best possible way.
It may now also be possible to upload a video of your house on to some of these websites. Anything you can do to differentiate yourself from the competition will work in your favour, and now taking video is so easy with your smart phone.
What will you do before renting out your property?
Share in our comments section your best tips for maximising your rental income when renting out your property.
Get more tips on renting your property here.
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.