Buying an investment property is one thing. Attracting the right tenants is another. If you are struggling to find tenants, you may be committing one or more classic landlord mistakes.
In order for your property to consistently attract tenants, it must be let out at a reasonable rental rate, be readily accessible to potential tenants, be well maintained and have the right features for comfortable living.
Unreasonable rental prices
It’s important to ensure a strong rental return on your investment by keeping the rent in line with market rates through small, well-timed rent increases. However, if you are overcharging on rent, especially if your property is not in a high-demand area, you will be ruling out a number of good potential tenants.
Charging enough but not too much can be a delicate balancing act. Do your research on comparable properties nearby if you are unsure of market standards.
Insufficient rental viewings
If your property is sitting empty, the only way it is going to become occupied is if potential tenants have opportunities to inspect it. Make sure viewing opportunities are held regularly until you have the tenants you want.
Particularly with older properties, ensuring that your investment is well maintained is essential for it to remain attractive to potential tenants.
Major tenant turn-offs include: carpets being dirty, floors being chipped, walls marked and bathroom tiles cracked; obvious mould or water leak problems; and major appliances like the oven, the heating, the hot water system or extractor fans not working properly.
It’s important to budget for regular maintenance of major property fittings, as well as for unpredictable minor mishaps that may occur at any time. This means you can’t think of rental earnings as 100 per cent income, but instead need to set aside a small portion of those earnings to fund occasional repairs and maintenance.
Lack of essential features
Tenants want to be able to enjoy being in their homes. As well as being well maintained, it’s important to ensure your property has all the right features for good living.
This means your property should have a readily accessible laundry (few people are happy using a laundromat, except as a short-term measure), interior bathroom and toilet, some sort of outdoor area or balcony, good-quality cooking facilities, and adequate heating and cooling systems. It’s also important that your property lets in a sufficient amount of natural light.
In older properties, bathrooms and kitchens date the fastest. While a complete modernisation of these rooms can be expensive, such renovations can often be transformative, giving a tired property an entirely new lease on life.
If your property has the potential for it, also consider how outdoor areas can be added, expanded or improved – would new decking make an outdoor space more usable? Would a new skylight, climate control system or laundry fittings also make a difference to the appeal of your property? If so, the renovation money could be well spent.
Contact K.G. Hurst today for expert advice on property investment, management and leasing in Sydney’s northwest.