How to easily increase weekly rents
The number of landlords planning to raise rents is creeping up.
Wednesday, October 26th 2022, 9:15AM
Independent economist Tony Alexander’s latest investor sentiment survey shows 74% of landlords intend raising rents in the next six months, up from 65% in August. Most planned to raise rents by 5%.
Trade Me’s latest data shows the national median weekly rent across the country rose by 7.5% year-on-year, slightly north of the 7.3% annual inflation rate for the September quarter.
The national median rent being asked for on the site is $575 - $40 higher than September last year and has remained in the $570-$580 bracket since January this year. However, it actually fell by 1% or $5, compared to August.
National agency Property Scouts (https://www.propertyscouts.co.nz/) says landlords need to keep their properties up to scratch if they want to raise rents, but they don’t need to spend excessive amounts of time, money, or energy to do so.
The agency says there are some easy ways to add value and subsequently increase the amount of rent landlords can fetch from their rentals.
1. Professional photography
Some photos on listings online don’t do the rental any favours. About 89% of tenant decision-making when choosing what listing to look at is visual. A good first impression is critical to attracting the attention of discerning tenants. If high-quality photographs aren’t used, it risks deterring tenants who would otherwise be willing to pay a higher premium for a high-quality property.
Even an average quality rental property can be presented well simply by using professional photography which highlights key features of the property using the best possible lighting and great angles.
Properties advertised using professional photography generally fetch higher rental revenue for property owners and are quicker to rent. This means reduced vacancy periods and increased return on investment - making the tax-deductible cost of professional photography worth it in the long run.
2. On-street appeal
First impressions are the most important and critical feature of a rental. The appearance of your property has a direct impact on the amount of rental income it can produce and the quality of the tenants it can attract. If tenants like your property and can see that it has been well looked after, they will usually be happier to pay more in rent.
The good news is a full-scale exterior renovation isn’t necessary. If your investment property has a garden in the front, spend some time removing weeds, tidying up any garden beds, and keeping the lawn looking fresh. It’s also a good idea to clean windows and footpaths. If your property doesn’t have a garden in front, clean or throw a fresh coat of paint on the front door and add some greenery if you have space. A new door mat can also enhance street appeal and make it feel more welcoming.
While it can be hard to control the presentation of your property if it is occupied, incentives often go a long way in encouraging tenants to cooperate. You could offer incentives, such as a meal voucher in exchange for tenants keeping the exterior of the property well-presented whilst it is being advertised for rent.
3. Complete all maintenance
All maintenance needs to be addressed if you want to increase the rental return on your property. If you can’t keep your property properly maintained, how can you expect people to pay higher rent? By ensuring all maintenance is addressed you can attract and retain good tenants who, you guessed it, are willing to pay a bit more.
4. Consider making your property pet friendly
Pet friendly rental properties are always in high demand and low supply. As such, they can usually fetch more rent than properties that don’t allow pets. Also, whilst you can’t legally require a bond of more than four weeks rent, tenants with pets will often offer to pay more rent to compensate for any potential harm caused by their pet.
If you’re worried about pets causing damage to your investment property, you can mitigate risk by taking out a landlord insurance policy that covers pet-related damage.
5. Build a fence
Building a fence around your rental property is a game changer when it comes to increasing value. A fence significantly increases the marketability of your property and will attract the likes of families and pet owners. Fences also offer greater privacy and added security, something that is highly sought after by many tenants.
Why make an effort to lift your property’s rental return?
Consider this - one of the factors that determines the capital value of a property (how much it is worth) is how much rent the property generates annually (gross yield). So, it stands to reason that if you employ the above tactics to successfully increase your property’s rental return, your property could also be worth more overall.
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