If you’re new to real estate, real estate agents Caroline Springs will help you in investing or looking to diversify your portfolio, it’s important to understand what a rental yield is, what it means for your investment, and how to maximise your return.
What exactly is rental yield?
The measurement of future income on an investment is referred to as rental yield. This is typically calculated annually as a percentage based on the cost or market value of the Buy property Deanside and has nothing to do with capital gain.
Increasing the yield on an investment property through depreciation strategies is simple, but it does require some planning and foresight.
-
Renovate your home
Renovations and cosmetic updates are critical in order to keep your property appealing in a changing market. This can not only help increase competition for your property and potentially increase rental yields, but it can also provide you with significant tax breaks.
For example, if you spend $25,000 on a new kitchen, appliances, curtains, and carpet, you can potentially claim up to one-third to one-half of that amount in the first year alone with a qualified quantity surveyor’s depreciation schedule.
Even minor changes, such as a fresh coat of paint or updated joinery, can have a significant impact without being overstated. Most property improvements will be a worthwhile investment that will pay dividends in both the short and long term.
-
Schedule of depreciation
Holding onto receipts after completing a renovation or updating the property is a good idea so you can complete a depreciation schedule. In the first year, investors can typically claim between $4000 and $15,000 on their property. While it can be back-dated, getting started as soon as you’re finished will ensure that your tax return contains the most up-to-date values.
While a depreciation schedule will cost you money, the money you will save in tax deductions is usually well worth it.
Speak with a quantity surveyor to see what you can save. With a few basic questions from the quantity surveyor, you’ll know whether it’s worthwhile to create a report.
-
Provide longer-term leases
Being forced to move on a regular basis is one of the most inconvenient aspects of renting, and it also costs money. As a result, many people may be willing to pay a higher rent in exchange for the security of a longer-term lease. If your tenants leave every 12 months, you’re constantly paying for re-letting and marketing costs. A longer lease will almost certainly lower these costs.
-
Property that is pet-friendly
While recent changes to the Residential Tenancies Act make it illegal for landlords to refuse renters with pets, there are still properties that are not suitable for our four-legged friends. Making your home pet-friendly by making it well-gated and secure, with the option of a doggy door, may encourage pet owners to pay a higher price.
-
Strategically raise rent
The art of setting rents is to raise them on a regular basis without driving out your tenants and causing vacancy. Consider what comparable properties are available nearby, as well as the cost and inconvenience of moving for the renter.
You will be able to get the best price for your property if you keep a close eye on the market and collaborate with your Barry Plant Property Manager.
-
Go over your investment loan again.
Lenders frequently change interest rates, so stay vigilant and compare your loan to the market on a regular basis to see if a better deal is available. A seemingly minor difference in interest rates can add up to a significant difference over time.
-
Keep up with maintenance.
Allowing the property to become run down and shabby will kill rental value. Broken fixtures and appliances are a big no-no. N7 Real Estate Property Management team will have a list of reliable tradies on hand who will fix any problem quickly and provide quality work at a reasonable price. Repairing maintenance issues as they arise will also help you keep your renter happy.
-
Make the most of street appeal
When potential buyers see your property’s kerb appeal, it sets the tone for what they will expect once they walk inside. They will assume the worst if they arrive at your house and see dead lawns and overgrown gardens.
Before you advertise your home for rent, schedule weeding, lawn mowing, and garden bed mulching, and you’ll have a much better chance of attracting your ideal tenant.
-
Select a low-maintenance garden.
Most people are short on time and would rather not spend their weekends maintaining their front and backyard. If possible, avoid plants or trees that require a lot of pruning or watering and instead opt for some easy-care natives.
This will increase the rentability of your investment while lowering your maintenance costs.
-
Maintain adequate insurance
Being adequately insured is critical for a property investor, but it is undeniably expensive. Annually reviewing all of your policies ensures that you are getting the best price and, more importantly, that you have adequate insurance. As property prices rise, you may discover that the level of protection you have is insufficient. Insurance companies may also provide bundle discounts if they manage multiple policies for you.
Please contact us.
You get gold of the best property appraisal services when you work with a N7 Real Estate consultant. Do you want to sell my property Fraser Rise? We are ready to help you. Say no to the hassles of buying and selling real estate. You are in for a cutting-edge experience. For more information, please contact us at 03 8361 8855.
