1. Increase the rent
If its been some time since you’ve raised your rent, it could be worthwhile seeking rental appraisals from a number of local property managers and comparing what they say. You might find you’re undercharging, particularly in the current climate of low vacancy rates.
2. Decrease the rent
The lost rent from a few extra weeks of vacancy can outweigh any gains you’d make by charging a higher rental. If you’re finding it hard to get a tenant, research rentals in the area and ask local property managers for their opinion so you can set a rental price below market value that’s likely to attract a tenant in the shortest possible time.
3. Switch to an interest-only loan
With interest-only loans you can reduce the size of your repayments, which in turn improves cash flow.
4. Refinance on a lower interest rate
Sometimes the fees incurred for taking your loan from one lender to another are prohibitive. But it might be worth speaking to a mortgage broker to see if you’d be better off refinancing at a lower interest rate with a different lender. Alternatively, you could ask your current lender whether they can reduce your interest rate. The lender is likely to be more accommodating if you have a large loan, or if it’s clear they might lose your business.
5. Buy a low-maintenance property
If you buy a low-maintenance property to start with, you won’t need to worry about the cost of constant repairs and improvements decreasing your yield. Newer homes tend to require less maintenance.
6. Self-manage
You can avoid paying property management fees if you manage your own property, though you should make yourself aware of the pros and cons of self-management before taking this step.
7. Maximise tax deductions
Consult a tax accountant specialising in property investment to make sure you’re claiming all available tax deductions. And keep receipts for absolutely everything Deductions you can claim immediately include: advertising for tenants, bank charges, body corporate fees, council rates, land tax, insurance, legal costs, repairs and cleaning. There are also tax deductions you claim over a period of years, these include borrowing expenses, declining value of depreciating assets and capital works.
8. Prepare a depreciation schedule
Both older and newer buildings have depreciation benefits that can be claimed. A quantity surveyor can prepare a depreciation schedule for you to ensure you’re maximising your claim.
9. Rent out furnished property
A furnished property will attract a higher rent than an unfurnished property. However, the furnished rental pool has a lot of short-term tenants, so you need to allow for higher vacancy. A property manager specialising in furnished properties is advisable. One property manager in Perth explains that furnished apartments target either the corporate market (and therefore need to be located in inner-city areas) or the overseas student market (these rentals need to be located close to universities and transport). She says such furnished apartments can attract significantly higher rents on shorter-term tenancies than standard leasing agreements. The rental amount will depend on the property’s location, size and age, as well as the standard of the furniture.
10. Lease by the room
You might rent out a four-bedroom house for, say, $350 per week. Or you could advertise “rooms for rent “and ask for $100 per room($400 in total). This strategy can work well in student areas, and you can often advertise through university websites/noticeboards. Try contacting the uniʼs housing office to see if they have a listing service. Find out whether any laws, such as boarding house regulations, will apply if you rent out a property by the room.