13 Mar 14
The main goals for property investors who own residential real estate are usually to generate income, reduce their tax liability by claiming allowable deductions and to make a capital gain when they decide to dispose of their property. To generate a reliable income, it is important that the rental property is clean, tidy and in good condition. There are a number of reasons for this. Firstly, a well-presented property will generally rent faster, achieve higher rents and will attract the best quality tenants. This will also result in fewer and shorter vacancy periods and a higher investment return for the owner. In addition, if the property is very clean and in good condition when new tenants move in, it sets the standard of care expected from the tenants and also the condition the property must be left in when they vacate.
The person who is best placed to assist owners to keep their properties at their peak is their property manager. Many owners who have purchased investment properties in the Illawarra do not live in the area. In fact, they may be interstate or overseas and rely on the property manager to maintain their property appropriately and keep them informed of the condition of their investment.
However, keeping a rental well maintained is difficult if the owner is unwilling to spend money on the property when necessary. This is something we discuss with new owners who ask us to manage their properties. We understand that it is paramount to maximise our client’s rental returns and minimise vacancy rates, and the best way to achieve this is to keep the property in good repair.
Tenants Legally Entitled to a Liveable Property
We explain that tenants have legal rights under tenancy laws to live in a habitable dwelling that is free from vermin and safe to occupy. We ask our new clients to look at their property through the eyes of a prospective tenant. From our experience, good tenants are every bit as houseproud of a desirable rental property as owner occupiers are of their own homes.
Neglected properties are the ones that can remain vacant for longer periods, not earning income because nobody wants to live in them. In addition, if an owner allows a rental to become completely run down, the cost of getting it back to the stage where it can compete with other comparable rental properties is usually thousands of dollars. This can be an unplanned large expense for the owner which takes a long time to earn back, and would not have happened if repairs and maintenance were done promptly and to a regular schedule.
A Freshen up Between Tenancies can Mean Increased Rent
Sometimes a rental property just needs a “freshen up” between tenancies, and if the owner is handy with a paintbrush, painting the interior walls and ceilings is all it needs to attract an increased rent and a quality tenant. Minor expenses like replacing aged tap fittings with shiny chrome ones and shabby curtains with new trendy blinds can make all the difference.
The point we try to make at All Residential Real Estate is that owners don’t need to spend a fortune, but they do need to spend something! We are always happy to offer advice to property investors on the most cost effective ways to make a rental property more attractive and achieve higher rent – just give us a call 02 4228 2555 or send us an email (email@example.com).