How To Increase Your Rental Income

As a property investors you want to make sure you get the most rent possible so you can get the best return on investment possible. Today we talk about how to increase the rental return on your property.

0:00 – Introduction
0:55 – Differentiate your property
3:33 – Marketing your property better
7:36 – Doubling rental income
9:10 – Presenting your property well
12:00 – Increasing rents over time

Rental Results – https://rentalresults.com.au

Rental Results YouTube Channel

Transcription

Ryan 0:00
As a property investor, one of the things you want to be able to do is to get your property rented, but also to get that property rented for the best price possible so you can get the best return on investment possible. So today I have with me, Lauren Robinson from rental results.com.au. She’s a rental manager. I’ve been in the industry for nearly 20 years now, and knows a lot about this stuff. And in today’s episode, we’re going to talk about how can we increase our rental return on our property and make sure that our properties always rented. So hey, Lauren, thanks for coming on today. Yeah, thanks

Lauren 0:35
for having me, Ryan.

Ryan 0:36
Yeah. So obviously, we want to make sure our property is rented and not vacant, because when it’s vacant, we’re not getting any rent rental income at all. But also, we want to maximize the rent that we can get on a property. So today, we wanted to share a few of those things. So what I guess how many of the biggest tips that you have for how to increase the rental return?

Lauren 1:00
Yes, I guess it really comes back to the type of property of God, but often we find, so things that are ways to differentiate your property would be say, for example, it’s a two bedroom unit in a building with 50 other properties. So that’s really hard to differentiate yours when they’re all sort of very similar layouts, offering the same specs, and it might be a new bill. So what you can, what things that tenants would be prepared to pay more for is typically storage. So thinking about like the over the, over the bonnet of the car storage solutions, or yet or having like maybe a storage option on the balcony that’s approved by the body corporate, so often units lack storage. Also, for houses, it’s also understanding the type of tenant that that’s that it’s likely to appeal to, and then the things that they want. So typically, especially in Queensland, it’s a conditioning tenants are prepared to pay more for things like dishwashers, fence yards. So we often get asked, Would attendant pay more for ceiling fans? So it really depends, but typically, if if a property was if there was a house, say a three bedroom house, and one had ceiling fans, and one didn’t, attendant typically wouldn’t pay more for that. But there would be a preference towards the one with the ceiling fans, whereas if it was air condition, they would possibly pay $10 a week or $15. A week more.

Ryan 2:27
Yeah, so there’s some certain things that’s like, Okay, this will help my property get rented more quickly. So if someone walks in a three bedroom house, in Brisbane, every bedroom has ceiling fans, they’re like, okay, check, at least they’ve got ceiling fans, if you walk into a house, and it doesn’t have ceiling fans. It’s like, Oh, that’s annoying. But look, I can do standing fans, and I can buy it for 20 bucks from Bunnings. And that will be okay. So it’s not like a deal breaker. They’re not like, Okay, I’m gonna pay more for ceiling fans. But obviously, air conditioning versus ceiling fans definitely, in summer in Queensland, is a very big difference in your living experience. So I can understand why people would be like, Okay, I’m gonna pay $10 more a week or $20 more a week, or whatever it is for air conditioning. So what I’m hearing from you is it really comes down to understanding your property, understanding what people in the market want, when it comes to that type of property, and basically trying to work out okay, what can I give them that they’re willing to pay more for?

Lauren 3:31
Definitely. Another thing I’ve seen happen. And we’ve actually experienced that ourselves where we’ve had a property, an organist come to us with a property that set on the market for, say, six weeks with a different agent. We’ve gone through and we’ve changed the marketing. So we’ve done professional photography, we’ve added the 2d 3d floor plans, we’ve had a virtual tour added to that advertising, and we’ve set it at the top of those searches. And we’ve been able to achieve $20 more awake, just and rented it within two days, purely because of the change in marketing.

Ryan 4:02
Okay, so this is someone who is sat vacant for six weeks. Yes. being advertised online, obviously. Wow. And then you’re able to get $20 more per week. Yes. And rent it within a couple of days, just from better marketing. So you didn’t actually change anything in the property itself?

Lauren 4:18
No. So nothing changed in that unit. And we actually manage others in the building. So we knew that it was being advertised below market rent. But yeah, purely came down to how it was advertised online, which led to us more attracting more tenants. Yeah. So

Ryan 4:33
what was so bad about the advertising before? I guess, people things to avoid? Basically, yes. So poor quality photos. So

Lauren 4:43
I think sometimes a misconception is that all property managers are the same. And I think sometimes people choose a property manager purely based on fees. And I think that’s really important. And I think for investors that have had properties for a long time and managed by different agents, they’ll know that you then Assign. So I think it’s really important to make sure that you’re really understanding Okay, how’s my property going to be marketing? where like, what sort of things can that agent offer that other agents aren’t doing? How will that attract a tenant at a higher rent? So I think that’s really important to understand.

Ryan 5:16
And is it expensive to get professional photos done to get a floor plan done? What about like the what I’ve seen the walkthroughs, where you can click and move around the place like they’re epic, they’re the best, right? It’s like, why doesn’t everyone have this? Is it super expensive to do?

Lauren 5:30
No, it really isn’t. It’s Listen, you know, like less than a week’s rent for all that sort of stuff. We do our own 360 degree virtual tours, so walk through to is, and yeah, so in those all those things are really important to make sure that you get you’re getting a quality tenant, so the best tenant that’s for that particular property, you’re also attracting the type of tenant that you want in that home, you’re getting the highest rent, and also in the quickest amount of time, which is all really invest at once Well, that’s it’s spending half a week to enter a week around, but now it’s not vacant for six weeks. So you can start to see the payoff there. And then also, let’s say that tenant only does a six month lease or 12 month lease and moves out, there’s the potential of the property still in the same condition, you can reuse the same photo, so you don’t have to pay for it again, next time. You just have it for next time.

Ryan 6:21
So if I guess marketing wasn’t one that I expected to say, okay, you can actually get increased rent as a result of this. Yeah,

Lauren 6:29
I mean, I’ve got a marketing background. So I might have got a marketing degree. And so that’s really important for me is making sure everything’s really well presented online. Because I know myself when you’re looking online at properties, if you see, you know, something online that doesn’t look or local that appealing, you can overlook it, and then go on to the next one. And I think sometimes it really, you know, it can do an injustice to your property. And like I know others in the office have rented properties that are amazing, but looked really bad online. And then I went to the inspection were like, wow, this is incredible. We’re gonna rent it.

Ryan 7:04
That’s the one you hope you find when you’re retired that there’s no one open for inspection. No one’s interested because it’s just poorly marketed. But, but obviously, as investors, we don’t want that. So are there any things that are like okay, for, obviously, not every property, but a lot of properties. These are like a few things that you see commonly that people can do to add value $5 a week here, $10 a week, they’re $20 a week, their air conditioning is one we mentioned, storage in unit complexes is another. Is there anything else?

Lauren 7:36
Yeah, definitely. So depending on the area, so I myself have a property in St. Lucia. So it’s near the University of Queensland. So I added another bedroom, just by reconfiguring the layout, and I was able to increase that rent from 260 a week to 520 a week.

Ryan 7:53
You say 260 to five.

Lauren 7:57
So it was it was a two bedroom. It’s now a three bedroom. So I also spent 26,000 renovating that. So new kitchen, new bathroom, fresh paint. But you know, not a lot of money. And I doubled the rent in that.

Ryan 8:11
Well, that’s it like you spent What? 26 grand, and then you get an extra Meili or $250 a week or something like that for it that will pay for itself in two years, basically.

Lauren 8:21
Yeah, definitely. So yes, I think it depends on the property. But I think yeah, there’s definitely things and that work wouldn’t work in every area. So obviously, changing that layout meant so like the livings really small now. But in that particular area, the students don’t typically care about the size of living area, they want bedrooms and want to

Ryan 8:42
separate bedrooms, because they’ve got their own space. So yes, yeah. Because you knew your market, because you knew you’d be renting to university students, not to a family who would value that bigger living space. It made sense to do that was doing the same thing in other areas. You made the living space, tiny and pokey, and you can’t fit a dining table in there that could actually mess up your rental return in some way.

Lauren 9:05
Sure. Yeah. It’s really knowing that market and who you’re actually who your end target audience is going to be so but yeah, so things like yeah, air con, particularly in Queensland dishwashers, ceiling fan storage is a big one and also just really making sure the property presents well, so if you’re just thinking about like driving up to the property is that the letterbox is all rusty? Is the fence falling over? How did the gardens look? Are they full of weeds? Do they cobwebs out the front. So just really had the presentation of the property is actually so important to enable to attracting a quality tenant who’s going to look after that property because I think you’ve attended contains up to a property it’s really poorly maintained. It doesn’t look inviting, you know, then that’s that’s going to flow through the tenancy and you’re going to attract tenants who you know probably think that you don’t care about your investment.

Ryan 10:00
That’s it. And sometimes illiquid paint can make such a big difference, especially if you’ve got walls that have a lot of wear and tear, dirt and grime and things that you can’t quite wash off because of years of use, or it’s outdated. I remember I used to live in a place that had this blue we call it the Winnebago bathroom, because it wasn’t even tiled or anything. It just had this like something you’d find in a camper van basically on the walls. Anyway, we talked to her with like bathroom paint painted at White. Same with the kitchen, it was this disgusting blue, used all paint to paint the tiles in the kitchen white. And then that property ended up renting for $30 more per week. Yeah, exactly right, we could paint. So yeah, and that was just on the Kitchen Bathroom, not the entire house either.

Lauren 10:47
So amazing. And it’s not that expensive to like i’ve you know, I’ve painted properties myself actually enjoy painting.

Ryan 10:53
you’re one of those people.

Lauren 10:56
But they think that you can jump in on a weekend do and and like we’ve had, you know, a group of friends help paint a property on the outside, we had a house that we painted on the outside, and it paints such a big difference rented before we’d even advertised, you know, at a lot more rent. So it’s worth doing those sorts of things. Yeah. So

Ryan 11:16
really, people need to look at their individual properties and say, Okay, how can we improve that? How can we improve this in order to get more rent, and then obviously, they can talk to a rental manager, like yourself, if they’re in the Brisbane area, or the rental manager in their own area to say, Okay, what sort of things can I do to add value? And I’m guessing generally, as a rental manager, you would know, straight away by looking at that property. Here’s what we can do.

Lauren 11:42
Definitely, yeah. And I mean, that’s it. That’s the most exciting part of my job. I love seeing new properties. And I love talking to owners about ways to increase that rental return, and to attract a better quality tenant, because at the end of the day, that’s why you have an investment, you want to make sure you’re getting the best return.

Ryan 11:57
What about I guess the last thing to touch on before we close this off is just increasing the rents over time, obviously, people get good tenants, though I’ve had don’t want to lose them. So I don’t want to ever increase my rents. So you’ve got the little old lady down the road, who’s paying $200 a week in a market where that property would usually rent for 400 or 500. But she’s just been in there for 10 years. Yeah.

Lauren 12:20
I mean, we’ve got a tenant who’s been in the property for longer than I’ve been alive. So like, you definitely get long, like write long term tenants that you really want to look after. And I think in that case, it’s really understanding what the market rent is. And then obviously, if you’ve got good tenants, I’d probably keep the rent below market for them. But making sure that you keep it in line with market, so might be slightly below like 10, or $15, depending on that tenant. But it is really important to make sure it is kept in line. So because at the end of the day, it’s an investment, it’s an investment property, it’s a business and you have to treat it that way. Yeah, it is a hard one. And that’s the thing, I think having a good tenant, you don’t want to be too emotionally attached, because sometimes then you don’t make those decisions based on, you know, what the business decision should be, as opposed to, you know, they’re lovely, and I really like them and want to look after them. So.

Ryan 13:11
And that’s the thing, you can raise rents with a good tenant. But if you’re not raising it all the way up to market rate, they’re still getting a discount for their longevity, and for how well they’ve taken care of the property. Which means they’re still probably likely to stay because I think so you raise the rents, and they’re like, well, we’re gonna leave, right, you raise the rent $20 a week, we’re gonna leave. But then if they start to look at the market elsewhere, they might say, you know, look, we’re still paying less than what we would pay in a worse place. And this is our home, we might say here, Do you often get when rental increases do happen? Do you get people leaving quite often is that fairly common?

Lauren 13:50
It really depends. And I mean, we always ask tenants, why they leaving? Obviously, if you’ve got great tenants, you really want to keep them. So you know, it’s a negotiation. I mean, we often have tenants coming back saying I want, you know, a rent reduction, or I’ll stay at these current rent. And it’s that then having that discussion with the owner, okay to say, Well, if you were to remarket the property, this is where I believe it’s sitting in the market. So then you’ve got to factor in, you know, that the costs involved in re advertising and finding new tenants versus, you know, perhaps renegotiating with that tenant to meet somewhere in the middle where it’s a win win for both parties.

Ryan 14:23
Yeah. And that’s it isn’t negotiation, and they can always come back and say no, and then you can, you know, change your mind if you want. I remember living in a place and they tried to raise the rent on us quite significantly. And we were already paying, you know, market rate or even slightly more at the time. And I was able, through my research and knowing how to find stuff online, I was able to send them back and say, Look, here’s other properties in the area that have recently rented, you know, we’re already paying above, like, we’re not willing to pay more and then they’re like, okay, you can leave rent.

Lauren 14:55
Well, and that’s it, I think, yeah, whenever you’re raising rents, it does mean To be in line with the market. So it’s understanding, okay, where what is the market rent from my place?

Ryan 15:05
And is there a certain amount that people tend to raise it by like $5? Or $10? a week come in? Or is $20? Too much? How do you know? Yeah,

Lauren 15:13
I mean, it really does depend on that market. And that’s why it’s so important when those renewals come round, that you’re getting a full market appraisal from your property manager. So you know, okay, these are comparable properties that have recently rented, and this is where my property sits amongst those. Because, yeah, it knowing the market is one thing, but just saying there’s a blanket sort of 10 $15 increase, or a CPI increase is not typically the case. I mean, we’re seeing in Brisbane at the moment that, you know, around the universities and, you know, in the inner city, rents are not increasing really, or very much at all. Whereas houses we’re finding there’s a strong demand. So we’ve had some properties where the rents gone up, you know, $40, a week sort of thing. And that purely is because there’s a lot of demand, and that’s where it sits in that market.

Ryan 15:57
Yeah. So I think that gives a lot of people things to think about with their own property, or if they’re getting into property, and they’re going to have to rent it in the future. It’s like, okay, I you want to market your property Really? Well, I think that was one of the biggest takeaways I got from this is marketing can play a huge role between your property saying vacant or getting more rent than you would have otherwise for your properties and don’t undervalue that, or skimp on that. And then it’s just looking at your specific property in your specific area, what people want, what your property is lacking what people are willing to pay more for, and working with your rental manager to really understand that in detail, and then put that into action.

Lauren 16:39
Yes, definitely.

Ryan 16:41
Exactly. And so yeah, and then obviously, keeping your rents in line with market value, as well would be the last thing so yeah, thank you so much for sharing this where can people find out more about you if they want to, you know, learn more or if they’ve got a property in Brisbane and they want to get a rental appraisal?

Lauren 16:58
Yeah, great. Yeah. So you can jump to our website so rental results.com Today you call our office anytime our details are on there, always email me as well. So Lauren at rental results.com today, we also have a YouTube channel. So with lots of information on there, too, but more than happy to chat to anyone about property.

Ryan 17:15
Yes, all incomes, all those in the description down below. And there’s also a free checklist rental results comm.au if you guys are interested, you can go to the scroll down, you can see the free checklist and grab that if you’re interested. So thank you so much for today.

Lauren 17:31
You’re on there. That’s great. Thank you.

Ryan 17:33
Thanks everyone for tuning in. I wish you the absolute best out there renting your property and until next time, stay positive