3 Questions To Ask Your Property Manager That Can Make Your Investment More Profitable
Quite often as a property manager you will come across properties that are well below market value when it comes to rent. Just recently one of the properties we secured from another agency was being rented for $420/week, changed hands and the rent went up to $500/week and the property was rented within a week! That’s a $80/week increase just by staying in line with market rents.
Take a look at the increase in median rents from some local suburbs below.
3 Questions To Ask Your Property Manager
IS MY INVESTMENT PROPERTY ACHIEVING IT’S MAXIMUM RENT?
Often people are afraid to raise their rents because they are scared that the property will remain vacant, but as long as you stay in line with market rent then you shouldn’t have a problem. If you’re afraid the tenant will move out, the best way to deal with this situation is to have your property manager show them what other properties in that area are achieving for rent, so if they do decide to move out, then they will have to pay the same rent somewhere else.
The most common phrase we hear is “But John keeps the house clean and always pays his rent on time.” Soon enough that $80 increases to $100 per week and you’re effectively missing out on $5,200 per year on extra income. Thats a holiday to Bali or new gifts for your kids.
2. IF NOT, THEN HOW CAN I IMPROVE MY RENT
With our busy lifestyles it is easy to have a set and forget mentality when it comes to our investment properties. We often do the bare minimum by keeping up with maintenance requests and only doing whats necessary, especially when we have long term tenants in place. For a small outlay you can increase the rent of your investment property which can be used to pay down your mortgage, reinvest in more property or even fund your lifestyle.
- Paint – Painting your walls a fresh white colour helps make the house look bright fresh and clean. You can now buy paint that can be used on tiles for your bathroom or even that 90’s splash back thats in your kitchen.
- Flooring – Replacing carpet in the bedrooms or laying new laminated flooring in the lounge room or kitchen goes a long way with making the house look modern and fresh. You would be surprise how cost effective this process can be.
- Vanities/Cupboards – Do you have that old timber look on your kitchen cupboards with the knob handle? They have paint for that too! All kitchens are different, but using a nice white, you can bring the kitchen back to life and replace the handles with a modern touch.
3. WHEN CAN I INCREASE MY RENT?
I’ll summarise it for you, but if you would like to read further you can visit the links below.
Fixed Term Lease:
• the agreement states the rent will be increased
• the agreement states the new amount (or how it will be worked out)
• the property manager/owner gives the tenant at least 2 months’ notice in writing, and
• it has been at least 6 months since the tenancy started or since the last increase
Rent can be increased if the property manager/owner gives the tenant at least 2 months’ notice in writing and it has been at least 6 months since the last rent increase, or since the tenancy started.
The property manager/owner and tenant can agree to a rent increase at the end of a fixed term agreement by entering into a new agreement. However, it must be at least 6 months since the last rent increase.