Market places change. These tactics can help investors increase their rental yield, regardless of price and market conditions.
Humans can be superficial. So even a basic cosmetic facelift to your investment property may be enough to command extra dollars in rent each week.
This could be a fresh coat of paint, more modern light fixtures, or updated blinds and curtains to maximise light. The rule is to keep it simple, not blow the budget, and ensure all changes you make are mostly timeless.
More substantial renovations
No amount of fresh paint will help if the kitchen and bathrooms look like something out of the dark ages.
Substantial renovations, like a new kitchen and bathroom, or new flooring, require capital and time, and of course a loss of rent, but can dramatically increase your yield. Apart from the immediate increase in rent, it will also reduce how much you will spend on repairs and maintenance in the long term, as you will have new appliances and fixtures.
Assess similar local properties to understand what the local standards are to avoid overcapitalising and to assist with budgeting.
Furnishing a property can instantly lift its rent, so long as this is appropriate for your location.
As an example, furnished properties may be ideal near universities where there is high demand for “turnkey solutions” by students. In this case, styling should reflect a younger demographic, and cater for potential wear and tear from socialising.
Travelling business people may also require furnished properties near airports or city centres, and may prefer not to spend through the nose on more expensive serviced apartments. In this case, styling should be simple, but modern and elegant.
Switch it up between long-term and short-term
Airbnb and Stayz are fast becoming common ways to make some extra rental dollars. But it pays to be strategic about this to cater for the extra hassle that may come along.
One way to maximise your rental dollars is to apportion six or so months of the year to regular, long-term renting, and only opt for short-term renting during the high-demand months. An example of this might be a beachside property which is likely to be in high demand from holidaymakers during the warmer months, but which probably more strongly suits a six-month lease over the colder months.
For property investors who don’t want to get their hands dirty, a whole host of Airbnb property management apps are now also popping up. This means outsourcing all of the hassle, for a small percentage of the extra income.
Renegotiate your mortgage
Finally, you could simply seek to pay less interest. This is also becoming easier than ever before, as more non-bank lenders enter the market and increase competition and pressure on banks.
The first step here is to find someone who is offering a lower rate than yours, ask your lender if they’re willing to match it, and be ready to walk if they won’t. Keep in mind that the interest rate alone does not determine the competitiveness of a mortgage product.
There are many other fees and charges, and you need to evaluate your payments overall to decide how much you will save by changing products.