6 ways to achieve a better return on your investment

Are you receiving market rent for your investment property, but wondering what else you can do to achieve a better return? There are mistakes that you or your property manager are making that could be costing you thousands. Im going to share with you 6 strategies to improve the return on your investment that does not involve the weekly rental return.

1 | MINIMISE VACANCY

This should be common sense but is easily overlooked. Every day your property is vacant costs you. At an average rent of $550 per week this equates to approx $79 per day. This can add up quickly when you first lease your investment, or between tenancies. So how can you minimise vacancy?

Use Quality marketing

You should have a suite of quality marketing available for your property. Professional photos, floorplan, virtual furniture and prime internet listings are a must to attract quality tenants in the shortest time.

Fast application processing

Quality tenants will apply for multiple properties. Your agent should be using the best prop-tech to ensure rapid reference checks, thorough id checks such as Equifax, and user friendly interfaces to secure the best tenants fast.

2 | KEEP QUALITY TENANTS

It costs more to attract a new tenant than it does to keep a quality tenant. Marketing costs, letting fees, not to mention days vacant, will add up quickly. So why do tenants choose to leave a property? The most common reasons are as follows:

Not actioning maintenance quickly

Good tenants expect and deserve a quick response to maintenance. Set a repair budget with your agency so when an essential repair is lodged it can be actioned quickly ie within 24 hours. Your agency should be using technology that allows tenants to report maintenance via multiple communication methods such as WhatsApp, sms, email, and QR codes. This tech should also have smart AI that provides an immediate response to common requests. For example, a tenant requests that the a/c is not working should have an automated response of "Have you checked the fuse box, check batteries, and clean filter before an agent is involved".

Communication

Tenants become frustrated when they are chasing their Property Manager or Landlord for maintenance, lease renewals, and general items. Property Managers can't be everything to everyone and like many industries, good Property Managers are hard to find. Great agencies will ensure their senior team members are focused on client communication with Landlords and Tenants while tasks such as leasing, routines, and ingoings are conducted by their support team.

3 | REPAIRS V'S MAINTENANCE

Completing repairs after years of neglect will likely cost more than the initial maintenance cost to keep your property in good working order. General maintenance should be identified at the bi-annual routine inspection. It is cheaper to action these items sooner than to wait for them to grow into a larger problem.

Did you know? The purpose of a routine inspection is to identify 3 key areas. Owner responsible repairs or maintenance, tenant cleaning or damage and strata maintenance, if applicable. Your agent should be conducting a routine at least every 6 months and providing you with a detailed digital report. A good Property Manager will identify any maintenance or repairs and more importantly help educate the tenant on how best to maintain the home. This results in a well maintained home and a full and quick bond refund for the tenant on vacate.

4| MINIMISE CONFLICT AND DISCREPANCIES

Most discrepancies occur between Landlords and Tenants at the vacate. If there is an issue and the matter escalates you may incur tribunal costs and most likely have to negotiate a settlement that could leave you out of pocket. A digital ingoing condition report is essential to minimise disputes when the tenant vacates. This report is like an insurance policy on your investment. Should there be a discrepancy at the vacate you have a clear and detailed report that can be used to compare the condition of the property at the start of the lease to the end of the lease. When a tenant begins their lease they also have the right to make comments if they do not agree or find other items. They then have 7 days to return this and their report can also be considered as a benchmark. A digital recording of this is essential. This is where paperless handover of the ingoing report is a great technology to maintain records.

5 | HAVE THE RIGHT INSURANCE

Landlords often believe they are covered for all events under their landlord policy, but this is not always the case. In particular, is the issue of accidental damage versus malicious damage caused by a tenant. Many general insurers only cover malicious damage, so in the event that an incident occurs and the insurer deems the damage caused by a tenant as accidental, you may not be covered. Make sure your policy covers you for both accidental and malicious damage, that way you know you are covered.

6 | TAX DEPRECIATION SCHEDULE

Did you know that the value of your building structure, plant, and equipment is depreciating? It's the value of your land that fluctuates in value and hopefully creates capital gain over time. Tax deductions through depreciation are the second largest deduction that is available to property investors, after interest. A tax depreciation schedule, with a forty-year forecast, is highly beneficial for both new and old residential investment properties. The best part is many companies offer a guarantee that if they obtain at least double their fee worth of deductions in the first full financial year claim, there will be no charge for the service.