If you increase the rent on your investment property by only $10 a week every year, in ten years you will be earning an extra $5,000 annually. Not bad for passive income, right?
There are many things you can do on your investment property to start charging more rent. The upgrades will also mean you find new tenants faster, leaving the unoccupied time (and you being out of pocket) to a minimum.
Of course, you don’t want to over-capitalise as there’s only so much extra you can charge for any upgrades you make, so think carefully about the changes before racing into them.
Don’t underestimate the importance of the kitchen
Often touted as the heart of the home, a kitchen ranks highly on the list of things people are taking notice of when they are looking for a new place to rent. A run-down kitchen will not only turn prospective tenants off, but it will likely cost more money in the long run with ongoing maintenance expenditure. A nice kitchen with working appliances such as a dishwasher can add up to $300 more in rent per year.
A climate for air-con
Australia’s hot climate makes air-conditioning a very welcomed luxury in any rental space. A place that offers air-con will be taken off the market faster and you are able to charge more rent per week. A split-system unit is a great idea, so tenants have both heating and cooling options. The cost of buying the system plus instalment will easily be made back again over the years.
Deep-clean between tenants
Whenever a tenant moves out, it is part of their contract that they need to thoroughly clean the place themselves or have it cleaned professionally. It should be left in a good enough state for a new tenant to be able to move right in. However, depending on the age of the property and how run-down it may be through regular wear and tear, it might need just a little extra TLC before going back on the market.
Cleaning the grout between the tiles of the bathroom, the laundry and the kitchen will make a big improvement. Some rooms may even require a new coat of paint and if the carpet is still looking old and threadbare even after a steam clean, it might be time to replace it.
It is best to do these upgrades between tenants, as you can market the new improvements as selling points and bump the weekly price up a little bit.
The great outdoors
Outdoor space is a huge selling point to a lot of potential tenants, especially for young families or for people who love to entertain. However, there is one general rule with an outdoor space; keep it low maintenance.
A yard with a manicured hedge or delicate flowers that need care will scream ‘high maintenance’ to tenants and that could end up turning them off. Of course, there are green thumbs out there who would love to have a nice garden to spend their weekends working on, but if you cater to them, you are reducing the pool of potential tenants when it comes time to fill the property. Leave the garden simple and your tenants can bring in their own potted plants if they love to garden.
Staying with the low maintenance theme, if you have front and back gardens make sure they aren’t overgrown with weeds and shrubs. Not only will it look messy and unappealing but to a tenant it will also look like a lot of work straight up.
If there is a lot of yard space in your investment property you could consider including garden maintenance as part of the contract agreement. This will mean you can charge more rent while also having another tax deductable expense, and the bonus is that it won’t be any extra work for you between tenants.
Additional storage space is always valuable in a rental. Extra cupboards and shelving are especially appreciated in key areas such as bedrooms, bathrooms, kitchens, and garages. If there is a decent sized internal laundry, adding a toilet and / or shower to that room is an easy fix that gives renters a second bathroom. Furthermore, a simple conversion of a formal dining room can give renters an additional bedroom or home office.
Fixing up the property will not only maximise the amount of rent you can charge, but it will also keep a good tenant happy. And a happy tenant equals a happy landlord.