How can investors make their rental properties more attractive?
When people invest in property for the purpose of shoring up their financial future with long-term tenancies helping to pay off the mortgage, there are a few strategies that these buyers can put in place to keep up with the modern demands of renters today.
Gone are the days when rentals were few and far between, and people were constantly struggling to find a place that suited their needs.
Now, there are more than enough suitable homes on the market, and they're becoming more affordable. There are also more people on the demand side of the scale, and some tenants are going to be more appropriate for your property than others. This is where your place should be sticking out as one that offers something different to prospective renters.
There are plenty of ways to do this, but what are the best ones?
1) Make your place critter-friendly
Australians have always loved their pets. Whether it's a dog, cat, fish, bird or some other kind of crazy animal, if a rental is open to having pets around then the number of potential tenants you will have calling you up and asking for a viewing could increase dramatically.
The RSPCA estimates there to be around 25 million pets in the country, with 63 per cent of families owning at least one pet. That's a serious number of people, and there are probably even more looking to take one on as well.
If you make your rental property pet-friendly, it will attract both people with pets currently, and those who want to at least have the option to get one at some stage in the future. With pets comes mess in a lot of cases, though, so while allowing these furry (or scaly) creatures into your home might increase your rental yield, it will also cost to initially prepare for.
Laying down some hardy carpet or tiles will stop permanent stains from dominating a living space or bedroom area when a pet inevitably makes a mess. Even by providing a really effective vacuum cleaner with the tenancy, you'll be doing all you can to make sure your home stays in tip-top condition.
2) Buy in a 'hip' suburb
Renters can be young or old, but whatever the age of tenant your home suits the most, buying in a 'cool' area is going to improve your chances of seeing immediate returns.
Where a person lives says a lot about their lifestyle to their friends and family, and nobody wants to live in a boring suburb. Doing some research of the local area will reveal which places are hot to trot, and which are not.
No one wants to live in a boring suburb.
Domain Group recommends Fortitude Valley, West End and Milton as suburbs that are currently attracting well-dressed, bearded (in some cases) cafe-goers who are by association upping the reputation of that space.
"Does the rise of this cafe culture follow property demand, or is it the other way around?" questioned Domain Group Chief Economist Dr Andrew Wilson.
"What we do know is inner-city Brisbane has had the best growth, and part of that is due to a change in neighbourhood taste."
The CoreLogic RP Data monthly indices positions Brisbane as a great city to buy in, too. The median dwelling value in the region is $539,160, which has increased an impressive 7.46 per cent over the past 12 months. Not only will you be attracting cool people to live in your rental, you won't have to spend nearly as much as in Sydney or Melbourne to get into your own investment property.
3) Look for style that won't date
Plenty of homes from the 90s were beautiful for their time, but nowadays just look tired and in need of a revamp. Some houses and units date better than others, though, so if you look for one that's got contemporary style mixed in with a whole lot of sound design principles, it won't age nearly as badly as something with a trending style.
If you buy a great-looking piece of property, there's going to be more interest in becoming a tenant. That's the whole point of this list – and it could help to increase the rental yield that you are investing in property for.
CoreLogic suggests that the market is currently seeing a slight downturn in rental yields compared to a year ago, but that shouldn't be putting anyone off. In fact, the slowdown is expected to continue, but renters will still be looking for new homes.
"We anticipate that the weakness in the rental market will persist over the year and rents will continue to fall over the coming months," said CoreLogic Research Analyst Cameron Kusher.
"With dwelling approvals at recent record highs and construction activity set to peak over the next 24 months, accompanied by many new properties still to settle, we anticipate that the weak rental market conditions will persist with rental growth continuing to slow and/or fall in most capital cities."
In the market for a rental that will set you up for life, but don't know where to start? A Cohen Handler buyer's agent is the key.