We often get asked why some properties lease faster than others
and what can be done to improve the appeal of a particular home. The standard of living has gone up considerably from where it was 10 or even 5 years ago. With so many new dwellings being built around the country it’s now normal to include fittings like dishwashers, air conditioners and built-in wardrobes.
Landlords are now finding it’s beneficial to update their properties if they want to continue achieving a good rent otherwise they risk falling below the average which means higher vacancy rates, lower overall rents and unfortunately tenants that may not care as much as they’d like them to.
A property in good condition that has the three items mentioned above will lease far quicker than one without.
Presentation plays a large role in leasing a property and things like flaking paint, a damp smelling carpet or one that is heavily marked will not be seen too favourably. We often make various concessions in our living arrangements for a whole range of reasons and while it’s easy to say that we could live with a carpet that is in reasonable condition but starting to get a bit shabby around the edges tenants are now far more likely to move onto the next property.
When it comes time to renting your property out ask yourself the question: “would I feel right recommending this home to my friends or family?”. We’re often more stringent about what we put forward to others whose opinions we value and when leasing a home it’s a good mentality to adopt.
-A new coat of paint goes a very long way. It freshens up a residence and can have an effect of brightening up a room in some circumstances. Always choose bright neutral tones and avoid colours – people will always add their own colour with their furnishings.
-New carpet can also have a large impact. The current trends are more in favour toward earthy tones for their longevity and stain masking qualities. Be mindful that if the property gets less natural light than desired it would be wiser to go with a lighter shade of carpet to help balance things out.
-Replace old fittings for new. A grand chandelier in a turn of the century sandstone residence is very complimenting but a factory line type made in the 70’s or 80’s is likely to be seen as old and unattractive. Swap out old hanging style light fittings for oyster lights that hug the ceiling and also provide the illusion of more internal space. With LED light technology getting cheaper it’s not uncommon to see these fittings with 30,000 hour + lifespans.
-Blinds are another fitting that can be replaced to add a fresh touch. Roller blinds are widely used for longevity as they don’t have many moving parts that can break. Vertical blinds are still a good option but avoid anything with chains along the bottom and opt for the type that have sewn in weights instead.
-If you have space for a dishwasher consider adding one. With many families being time poor a dishwasher is often seen as a way to alleviate standard pressures of life. Avoid slim or drawer units if possible as they’re much less common and may cost more to repair or replace if necessary.
-Add a reverse cycle air conditioner. Some homes require this more than others but all will benefit from this addition. Be careful of providing options such as gas heaters as these add moisture into the air which can turn a nice beautiful home into a mould trap during the colder months.
-Built in wardrobes are a great addition if space allows. Queen beds are the norm and tenants like to have enough space for their bedroom furniture as well. If adding a wall to wall built in wardrobe will mean people can only fit a bed and nothing else see what other options are available for creating storage in the home. Perhaps a smaller standalone IKEA cupboard that can be moved around the room.
Here are some things you can consider for your investment if you feel it’s not performing as well as it once used to:
Now that my property is ready for someone to move in what else can I do to increase the appeal?
When your investment is on the market it pays dividends to consider what the competition is doing. With the growing emergence of smart phones and tablet devices many people are now using those to find their next property. Because portable devices have smaller screens than computers it’s important to get the advertising right.
-Professional photography is the first thing you should consider when marketing your property. It’s a proven fact that properties with good photography draw bigger crowds and lease faster. A standard camera can always be used to take some photos of a home but when compared side by side with the same angles taken by a professional the difference is astonishing and if two ads were posted online of the same property with the only difference being the photos it’s easy to tell which will draw a more positive response. The initial cost is a fraction of the weekly rent in many cases and can save you many times that amount.
-If your property is vacant a good addition to professional photography is virtual staging. Digital images of furniture are placed in strategic locations to help people envision how they can place their belongings and in some cases can help to sell the lifestyle aspect of the home.
-Advertising on both of the major real estate portals instead of just one is a must. Domain.com.au & Realestate.com.au dominate the marketplace with the former being more popular amongst people searching for property in NSW. The better subscription packages place your property higher on the list and make the photos larger to help people see them better.
-Decluttering is essential. When it comes time to show several groups of people through a home it gets very awkward when they’re forced to huddle in to move around various rooms. Remove items that are not needed to showcase the space that would be available to the next occupants.
What are some other ways I can improve my net returns?
-While you might assume a depreciation schedule is only beneficial on new properties there are still savings to be made on established homes. Some companies that provide these reports will even provide a guarantee in relation to their fees for service (which is also tax deductible) so it’s a worthwhile consideration when thinking about other ways to offset your tax.
-Refinancing your mortgage is another way to potentially free up some money on a regular basis. A skilled mortgage broker will be able to assess your current loan and financial position and advise if it’s possible to improve your cashflow. Ask us for a recommendation – it’s a free service.
-Land tax can affect the return your investment provides. As at 2015 the land tax threshold in NSW is $432,000 and payable for the year ahead on 31st December each year. If you will be purchasing an investment that is eligible for land tax and you’re close to that date consider settling a bit later. The current owner may have a clause in the contract in relation to these kind of situations but these things are often negotiable rather than set in stone. Another consideration is if you’ll be leasing out your principal place of residence close to the above date. It may be better financially to have a tenancy commence in January but this depends entirely on how much land tax you would be liable for.
-Careful consideration should also be made on the type of property you’re considering purchasing if it will be your first investment. There are various investment strategies that are affected by the type of dwelling you buy. If you’re unsure about what strategy is best for you or if you would like an opinion on a likely rental return for a property you’re considering purchasing contact us for a brief discussion, we’re always happy to help!