Six ways to make your investment property attract truly great tenants.
So you did your research and found a great investment property and the deal is now done. Congratulations! But before you can start counting on the rent cheques rolling in, there’s a few things my experience as an agent has taught me that you’ll want to keep in mind.
Ultimately, the success of any investment property relies on a very human factor – the tenants that will be paying to live there.
While many owners rely on estate agents to find and manage tenants, there are actually some important things a savvy landlord can do to increase the chances of having exceptional tenants.
1. Pick the right agent
One thing many owners have found is that simply going with an agent that promises the lowest fees can be a very poor decision. As with most things – you get what you pay for! So ask around your family and friends that also own investment properties and find out which agents really care for your property as if it were their own.
The best agents have sound processes for managing applications, check references, and have good policies around rent arrears, inspections and managing complaints.
Take a look at potential agents’ websites – is their marketing up to date? Are they likely to give your property a fair chance at attracting good tenants?
The right agent is crucial to ensuring the business of being a landlord is as stress-free and de-risked as possible.
2. Look after maintenance
Attracting and retaining good tenants is not just a matter of having the house, it also relies on maintenance being managed effectively and in a timely manner. For one thing, there are some aspects to maintenance that can actually leave a landlord needing to pay compensation to tenants, such as leaks or moisture issues that create hazardous mould or result in damage to the tenant’s personal property.
When the home is between tenants it is an ideal time to have a thorough inspection of the property to assess any issues that need to be rectified.
You will also want to discuss with the agent how they manage reports of maintenance being needed. How are complaints or reports triaged? What is the procedure for urgent issues such as pipe springing a leak, the sewer blocking up or damage due to a storm or other event?
How does the agent manage issues that arise during routine property inspections, such as door handles coming loose, cracks in windows or other more minor maintenance issues?
How often will you replace or refurbish window coverings, floor coverings and paintwork?
The bottom line is, a tenant is more likely to respect and retain a home where maintenance is handled in a timely, efficient and reasonable manner.
Retaining your tenants also saves on maintenance, as constant moves in and out take their toll on floor coverings, doorframe paintwork and other parts of the home.
3. Listen to the market advice
Rents are very much a moving feast for landlords. As the forces of supply and demand for rental properties shift due to factors such as changes in local employment conditions, the time of year, interest rates and new apartment developments in your property’s neighbourhood, the rent the market will accept for your property can change.
In a landlord’s market, supply is tight and rents go up. In a tenant’s market, high vacancy rates can see rents fall.
Ideally, you are signing up tenants in a landlord’s market – but this will not always be possible.
Educate yourself on what rents are being advertised for comparable properties in terms of the age and condition of the property, the number of bedrooms, and any amenities such as a pool, second living space, double-car garage, media room, established gardens, solar PV or additional bathrooms.
Do not be tempted to go too high – it is better to sign a tenant up at a reasonable rent quickly for a longer lease, and then look to increase rent later on in line with market conditions and within the limits set by the applicable residential tenancy legislation in your state.
4. Present your property well
Great tenants are looking for a great place to call home! When you are preparing your property for rental, you can create the best first impression by following a few simple steps.
Make sure any garden and outdoor living areas are looking neat and easy to care for, while at the same time welcoming. Ensure any rubbish left behind by previous owners or tenants has been removed. Clean the gutters, and have any cobwebs removed from areas such as porches, windows, door frames and light fittings.
Engage a professional cleaner, preferably, to do a full clean of every room. A sparkling kitchen and bathrooms in particular help create that sense of a well-kept and inviting place to call home. Have the carpets also properly cleaned, and tile areas mopped. Make sure the number of the house is clearly visible from the street to help your prospective tenants find the house easily.
5. Be responsive
Just as you would want a real estate agent that returns calls promptly, as the owner of an investment property you will best serve your own interests by being responsive to your agent or property manager.
That also means being ready to make decisions when a fast answer is required, for example, a critical repair needs to be undertaken immediately.
You can prepare yourself beforehand for many of the types of enquiries you might receive, for example, by finding out which tradesmen you would prefer work on your property when necessary.
Establish if they have an out-of-hours callout also, and make your agent aware of your preferences.
You will also need to be responsive to any issues identified during either routine inspections of end-of-lease inspections. Where it is an end-of-lease inspection, you will also save yourself money in the long-term by resolving issues quickly, so the property can be made available to your next tenant with minimum delay.
6. Keep the end game in mind
At all times, keep in mind the reason you became a landlord! The end goal is have an investment property that creates a reliable income stream, whether that is positively geared or negatively geared.
Your property is a business in its own right, and needs to be treated like one.
Also, if the property is properly managed and cared for, you can expect its value as an asset will continue to grow.
One of the things about having great tenants is they will care for your home and treat it with respect – which also means they are being good guardians of your nest-egg.
If you would like to know more about how to achieve optimum success with your investment property endeavours, please get in touch!