3 ways to make more money from your investment property
A good investment property in a good location is the foundation for success as a landlord. Your property will not only lease faster than less desirable properties, but the capital growth will also provide a nice nest egg in the future. Meanwhile, there are a few things you can do to increase the value of your investment property. We’ll go over three things you can do to maximize your earnings.
- Review rental prices regularly
Rental rates do not remain constant. When the time comes, such as the end of a tenant’s lease, make sure you and your property manager evaluate whether you have room to raise the rent you charge. The key here, of course, is to be mindful of the market and not raise the price so much that you end up with a long vacancy period.
Check what similar properties in your suburb are charging each week to ensure your rent achieves a balance between being competitive in the market and helping you derive the most value from your property. This exercise will help you determine what is a good value in your area and whether you are overcharging or undercharging. And, if you plan to raise the rent when giving a tenant the option to renew their lease, make sure you give them plenty of notice and follow the relevant tenancy laws in your jurisdiction. Your property manager will be able to assist you with this to ensure that everyone is happy and that everything is in order.
- Keep your property updated
It is not necessary to spend a lot of money to update your investment property. Simple improvements like a fresh coat of paint or tidying up the lawns and gardens can help make a good first impression on quality tenants. If other items, such as appliances, are showing signs of wear, consider updating them as well. While updating appliances requires an initial investment, it can help you attract higher-quality tenants and is a tax deduction. Consider making large purchases, such as new appliances, at the end of the fiscal year to reduce the amount of time you are out of pocket.
If you want to make a larger change to your home, you could consider renovating to add an extra bedroom or study area. Additional bedrooms can be a great way to attract a broader range of tenants to your property. Similarly, designating areas for at-home work and study is a clever way to attract tenants who work from home.
- Be prepared for tax time year-round
You can maximise the value of spending on your property at tax time by keeping thorough records of expenses year-round. These records might include a depreciation schedule, documenting your interest expenses, invoices and receipts for all costs incurred for capital works, and receipts for deductions.
You can maximize the value of your property spending at tax time by keeping detailed records of expenses all year. These records could include a depreciation schedule, invoices and receipts for all costs incurred for capital works, and receipts for deductions. Investing in real estate is a great way to build wealth and generate cash flow. You can maximize the money you make from your property by being mindful of what you charge for rent, keeping your property fresh and updated, and keeping detailed records. If you want to make more money from your property, talk to your property manager to see if any of the above options are appropriate for your situation and if they have any other suggestions.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.
