Australia has some of the strongest tenancy protection laws around, and they affect your ability to raise the rent prices in a rental property.
These laws are periodically reviewed and amended to afford tenants more rights without sacrificing the interests of landlords and investors.
Some of the legal provisions afford landlords the right to increase the rent on their property as long as they do it by the book.
While the specifics vary between states, the process of raising the rent on a rental property is pretty standard.
You must issue the tenant with an adequate notice period before effecting the increment, and you can’t raise the rent more than the allowable times in a year.
In most states, you need a clause in the lease agreement allowing you to raise the rent for tenants on a fixed rent agreement.
Again, you must be reasonable when raising the rent, as the tenancy laws allow tenants to push back against unfair rental prices.
Here are seven practical ways to help you grow your rental income quickly.
Renovate the Property
Sprucing up a rundown property can help you appeal to a higher caliber of tenants and increase the rent.
Renovating a property also lowers your repair and maintenance cost while creating a lovely home environment. Here are some of the most lucrative home remodels.
- Bathroom makeovers: Ugly and jaded bathrooms only get worse from years of wear and tear and are a turn-off for potential tenants. Most people are particular about their bathrooms because they are a highly personal space. Updating the walls, cabinetry, and sinks, as well as installing a water-efficient water system can hand you significant wins.
- Makeover the Kitchen: The kitchen is the heart of a home, and people love an updated kitchen since it plays a central role in their lives. Resurfacing the kitchen counters, updating the cabinetry and flooring, improving the plumbing and electrical systems can grant you quick wins.
- Spruce Up the Appliances. Phasing out the dated washing machines, dryers, fridges, and HVAC systems are simple ways to improve your property when you need to raise the rent. Tenants are keen to move into a rental property with modern equipment because they are energy efficient, which translates into huge savings on utility bills.
Reduce the Administration Costs
Cut the property manager loose, if you have one.
A property manager takes anywhere between 5-15% of your rental income each month.
Cutting them out instantly increases your rental income.
Traditionally, property managers were invaluable because they had access to expensive technology that was out of reach for many landlords.
That’s not the case anymore, as this technology is readily available to anyone regardless of the size of their portfolio.
Embrace Automated Property Management Solutions
Harnessing the power of property management solutions such as Lodge injects a dash of professionalism into your management strategy.
This newly accessible technology lets you operate with the efficiency of a property manager without making it a full-time job.
Property management tasks are repetitive and, as such, lend themselves to automation.
Property solutions automate every aspect of the management tasks to let you take full control.
From creating lease agreements to screening tenants to collecting rent to managing repairs, you can do it all with the click of a button.
They also include a centralised communication system to let you connect with your tenants without enduring frantic calls at every waking moment.
The system lets you tend to repairs and maintenance needs quickly and efficiently without visiting the property.
Property management solutions let you manage your investment from a healthy distance without compromising service delivery.
Keep Up with the Rental Property Market
Compare asking prices on similar, local properties.
The property market is highly dynamic, and so the prices shift with changes in supply and demand.
Having great insight into the state of your local market can help you keep your asking prices current.
Basic comparable research can help you figure out the average and median rental prices within your locality.
The internet lets you compare rent prices from different sources: aim for at least five property listing sites.
Comprehensive research goes beyond the price to include the type of property, number of bedrooms and bathrooms, the location, lawn, pets, and parking spaces.
A spreadsheet will help you create a property profile and zero down on the amenities that command a higher asking price.
A thorough analysis is instrumental in coming up with a pricing criterion, which is crucial when managing a diverse portfolio.
Pricing each property on its merits can increase the rental income and inform your marketing strategy.
It keeps you from feeling in the dark when planning to raise the rent while ensuring that you never leave money on the table.
With proper execution, you can even price your rental units higher than the market prices without compromising your occupancy levels.
Understand the Market Dynamics
What drives the rental prices in your local market? Who is your target market?
Answering these questions and more can help you plan and execute rent increments.
The tenancy laws in many states restrict rental increments on a fixed lease agreement while allowing one or two raises per year.
Baking the rental increments terms into the lease agreement lets you grow your rental income by the book.
On the other hand, explicit knowledge of the target market offers insights into their buying power, and how far you can push the rent raises.
Working-class families with school-going children are unlikely to embrace the increments and opt to vacate the property instead if you raise the rent.
White- and blue-collar workers might accept the raises or might opt to push back through the avenues outlined in the Residential Tenancy Act.
Again, you can use the size of the house to self-select the tenants.
A large house with many bedrooms in a low-income neighbourhood might mean taking more than one tenant per property to raise the full rent.
A small three-bedroom house is likely to narrow your pool of applicants to young families.
Increase your cashflow by self-managing your property.
Double Down on Advertising
Where you list your vacant unit affects your occupancy level.
It takes more than a sign in the front yard to grow the occupancy levels in a rental unit.
This means you will have fewer prospects looking at the property, which lowers the demand.
A sign in the front yard won’t draw as much attention to the property as listing it online.
In the end, you might have to lower the rent just to get the property off the market, which is not ideal.
On the other hand, listing on authoritative sites such as realestate.com.au increases your reach and creates a buzz around the property.
That increases the likelihood of having a stream of high calibre tenants beating a path to your door.
In that case, you can cash in on the growing demand to fill the property quickly and at a higher asking price.
If a prospect balks at the rent amount, you only need to cross them off and move on to the next name on the list.
Take Quality Photos
There’s no room for blurry, low-resolution images when listing a vacant property on the internet, or anywhere else.
Visuals are half the battle in online listings, as awkward, low-quality images will only get prospects scrolling past your advertisement.
Professional-grade photos are not only eye-catching but also give the prospect a feel for the property.
If you do an excellent job, these photos can have a prospect committing to the property on the spot.
Investing in a high-end camera will give you an edge when listing vacant units on the internet, and the camera will more than pay for itself in increased rental income.
A refined set of real estate photography skills is an asset as well.
You see, there’s an art to taking winning real estate pictures.
For instance, you shouldn’t take head-on images since they make the properties appear smaller.
Applying a 30-degree angle to each photo makes each picture larger and more appealing to the eyes.
Eye-catching photos that flatter the property attract more eyeballs, prompting more people to view your ad.
Increase the Return on Your Rental Property Investment
A smart rental property management routine powered by intelligent solutions such as Lodge is central to growing your rental income.
These new software solutions are a godsend for self-managing landlords and property managers since they automate the property management tasks.
They enable you to list vacant units, process applications, screen tenants, collect rent, and handle repair and maintenance at the click of a button.
A smart management regime keeps your tenants happy and the property in great shape, effectively reducing the turnover rate.
Here’s a free resource to help you polish and streamline your rental property management skills and grow your rental income quickly.