A Property Investors Guide To Guaranteed Rental Increases
Smart property investors know that while it’s nice to see our properties increase in value, none of us are getting rich from what a property is worth. What we really need is a guaranteed strategy for frequent rent increases.
Rent is your weekly or monthly incomes from your property. And it’s an income you don’t work for.
It’s the absolute key to good cash flow and passive income, so it’s essential you are able to keep raising your rents at regular intervals.
But, what makes it possible for property investors to do this?
QUALITY OF LOCATION
Before you’ve even invested in a property, you need to know that location is a key factor in how much rent you will be able to charge.
In one way, it’s good to think about it as a simple equation of proximity. The closer your property is to something that people want or need to live by, the better rents you will be able to charge, and raise.
This might be proximity to the CBD, the ocean, or a train station that gets you into the city in less than 10 minutes.
Whatever it is, there needs to be a drawcard that will keep bringing people to that area and make it a location people want to live in.
Buy a property in close proximity to that drawcard, and you will be able to charge good rent rates and raise rates at regular intervals.
Remember, it’s easy to change a property once you’ve bought it. New kitchen or bathroom, or new air-con. But it’s impossible to change location. Once you’ve bought a property you can’t decide the location is all wrong and pick up the bricks and move them. Location is forever, so get it right.
QUALITY OF TENANT
As a property investor you cannot expect to be able to charge competitive rent rates and raise them regularly, if you don’t have tenants who are willing and able to pay.
Again, the quality of your tenant will be influenced in part by location. Is there good infrastructure? Are there schools, industries, transport? Will the people who live here have good, stable incomes and prospects to improve their wages?
If the answer is yes, you are likely to attract tenants who are willing and happy to pay for rising rents so they can live in the location that gives them the life they want.
QUALITY OF PROPERTY MANAGER
Imagine you have a suitcase with $1 million of cash inside. What kind of person are you going to entrust your money with? The cheapest, greenest guy with little experience, or the more expensive person with 10 years guard experience under their belt?
Smart property investors take their time when selecting the right property manager to care for their investments, and don’t just pick the cheapest option.
Good property managers will know when it’s time for you to invest in your property so that you can continue to charge the rent rates you need. During inspections (and beyond) they’ll look at the property from the sidewalk, as well as inside, taking note of what the tenants might need, as well as if they’re caring for your property properly. Good property managers know that happy tenants, who feel their needs are being met quickly and competently, will feel comfortable with a rise in rents.
You might need to pay a few more dollars for a decent property manager, but that small investment will ensure adequate increases.
SUPPLY AND DEMAND
One huge factor that affects the ability for investors to raise rents is how supply and demand differ in your area.
The better the location, the more demand there will be for rental properties, meaning you can raise rents.
The reason this will be so important in the next year and beyond is a prediction that as soon as the international borders open, there is likely to be a significant rise in population and people needing places to live.
Australia is an attractive place to live at the best of times. But the way we have weathered COVID-19, could make people from all over the globe want to live here. And they will all need somewhere to live.
DEVELOP YOUR RENTAL STRATEGY
As an investor you need to put your business hat on and think about who is the end user and what is the core purpose of the property?
If you’re not the best in the market, you’re not going to get the best. It’s that simple.
As investors it’s in our best interest to keep making smart decisions around the real estate we own in order to meet our overall financial goals. Our team of property experts know exactly which assets are the best for you to buy based on your individual needs, as well as a solid rental strategy to help you maximise your property to ensure you’re getting the best rental return and tenants.
You can join the discussion around this by registering for one of our free property nights, run by our knowledgeable coaches. At the same time, you’ll learn real-life strategies for long term investment, putting you miles ahead of other investors in the marketplace.
This is a high-value event so booking a space is essential. Click here to register!
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