Finding the right tenants and maximising your rental returns

Know who your property will suit and attract

The tenants your property will attract will mainly depend on its size and location, but also the condition of the property and its facilities will also play a part.

Get a good agent/property manager

Critical to this process will be finding and working with the right local letting agent. They can assist you in deciding what maintenance and improvements you should make before you advertise it for rental. You can then use an agent for setting a rental rate, advertising and finding the right tenant, signing the lease and the ongoing management of the property.

Stay up to date on current market rents

Over time, especially with a long term tenant, the rent being paid may not stay up with the current market rate. It is important to stay up to date with the rent being received on comparable properties in your area and ensuring your property’s rent doesn’t fall too far behind over time.

Minimising any vacancy period.

Make sure there is no delay between a departing tenant’s notice that they are vacating and the advertising of your property. Usually 12 month leases, rather than six months, will lead to a more stable tenancy and thus less vacancy periods and costs to find new tenants.

Minimise non chargable wear and tear

It is usually the property manager’s task to conduct and document regular property inspections and note any unreasonable wear and tear, and to charge the tenant accordingly. If this policy is firmly committed upfront, tenants may look after your property better.

Negotiate reasonable property manager fees

Property Manager fees tend to vary quite widely agent to agent, and from state to state. It is unlikely they will be less than 4.5% of rents received and rarely above 9%. Even a 0.5% reduction can make a difference to the costs over time.

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This advice is general and does not take into account your objectives, financial situation or needs. You should consider the PDS and Terms & Conditions, available from IMB, before making a decision about products related to property investment. Financial Planning services are provided by IMB Financial Planning Limited ABN 23 094 730 195 AFSL 234 660