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!
Recent Articles
3 Ways a Property Investor Will LOSE Money!
There are many ways you can win big by investing in real estate. Equally, if you lose sight of the basics, you’ll end up losing something much worse – money! No one sets out on their property journey to go backwards financially, so take note of these three common mistakes that investors often make, because if you don’t, it may cost you in the long run. Here are 3 ways an investor can lose money…
An Investor’s Guide to Multi-Income Properties
When it comes to building a booming property portfolio, diversity is key! There are four primary multi-income types that Australian investors can buy at the moment.
Property Cash Flow Basics For Creating Passive Income
Buying real estate is similar to running a business – good performance is derived from your ability to generate cash flow. For a property investor, this means eventually living off the passive income that your real estate generates. Therefore, it is especially important that you map out your ability to build a portfolio that will deliberately achieve this level of success from the get-go.
How Property Investors Can Reduce Tax Down To Zero!
Those who own real estate are subject to many, different kinds of tax. Some tax is unavoidable. Other kinds of tax are legally, 100% avoidable – or at least able to be reduced substantially. With the Victorian government recently announcing a rise in the land tax threshold it’s even more important that property investors know where they can and should minimise the tax they pay.
A Property Investor’s Guide To Depreciation
Every smart property investor knows that to create and maintain a portfolio, we need to have good cash flow. One of the ways we can support this is by using depreciation and tax. But, just like equity, depreciation only works for us if we know how to access and then leverage it.
The Only Time You Should Sell An Investment Property
The golden rule of property investing is to buy well and NEVER SELL. However, there are always exceptions to the rule… Firstly, let’s look at why you would keep an investment property? If you buy a great piece of real estate, in the right location, it will always create a passive income for you, so there will be no reason to sell it.
House vs Apartment – Which Is Better for Capital Growth?
Many property investors favour one type of property – either apartments or houses. While there are pros and cons to both, which we will discuss here, one of the often forgotten advantages of houses is the investment you’re making not only in the bricks, but also in the land. Land value in itself increases over time, and investment in a piece of land also provides opportunity to renovate, subdivide and develop, all of which lead to greater capital growth.
Use Equity To Create Cashflow in 4 Simple Steps!
Equity is an interesting topic when it comes to real estate. Smart property investors know that equity can play a key part in creating passive income that accumulates over time, allowing us to eventually work less and ultimately do more of what we love. But in order to be able to use equity to create passive income, there are some important steps property investors need to take right at the beginning of their journey.
Economy Bounce-back Better Than Expected, What Investors Need To Know
Bouncing back much faster – and stronger – than predicted post-COVID, the Reserve Bank of Australia (RBA) is anticipating a good end to 2021, and a great 2022. But with so much uncertainty over the last 12 months, it’s hard to know if this economy is here to stay, and if so, how it will impact property investors in the long-run.