Tips To Increase the Cash Flow of Your Rental Property
When purchasing a long-term investment property, one of the most important considerations to take into account is cash flow of your rental property. Cash flow refers to the income generated by your Perth investment property after you have deducted all of its expenses, these may include maintenance, property management fees, and mortgage interest. An investment property with positive cash flow is one of the more secure strategies for investing and is perfect if you plan to hold your property for a long period of time. Here are some simple ways to increase the cash flow of your Perth investment property.
Increase the rent
The easiest way to increase the cash flow of your investment property is by slightly increasing the rental rates, particularly if you haven’t done so in a while. After all, market fluctuations can result in an increase of your costs such as taxes, bank fees and utilities. This means it’s important that your rent reflects these changes in the Perth property market rather than bearing the brunt of these increases yourself. While there is always the risk that increasing the rent will push your tenants to jump ship, if the rental market allows and if your investment property is well-maintained, safe and comfortable, your tenants should understand the need for a slight increase in the rent.
Make simple updates and renovations
Another way of increasing the cash flow of your rental property is through simple updates and renovations. There’s no denying something as easy as a fresh coat of paint can breathe fresh life into your property, while also covering up any wear and tear. Further renovations such as updating the flooring, fittings and fixtures can reinvent the look of your rental property without breaking the bank. Similarly, one of the most in-demand renovations is installing air conditioning or a reverse-cycle system that provides both cooling for the summer and heating for the winter. While updates and renovations cost time and money, they can lead to an excellent return of cash flow by increasing the value of your Perth investment property and giving you the opportunity to increase the rent.
Make your rental pet-friendly
While making your rental pet-friendly comes with a myriad of risks, it’s a sure-fire way of making your property more competitive. After all, Australia has one of the highest percentages in the world of households with pets and yet there is nowhere near a sufficient number of pet-friendly rentals in the Perth property market, as almost no apartment buildings and only a small percentage of landlords allow furry friends. Tenants with pets may also be more likely to sign longer leases as moving can be disruptive to animals.
The fit out of your investment property and security for animals are typically the most important features to pet owners. This means making your rental property pet-friendly may require you to make small changes, such as ensuring the floors are easy to clean and spill-proof, and the fencing is sturdy.
Carry out regular preventative maintenance checks
You’ve heard the saying ‘prevention is the best cure’, and it rings particularly true when it comes to your investment property, as repairs are typically expensive and time-consuming. To avoid sudden emergency expenses breaking the bank, make sure you carry out regular preventative maintenance checks, particularly with the changing of seasons. It’s also essential to check that your roofing, plumbing, lighting, and heating and cooling system are well-maintained.
Seek expert advice from Rentwest
At Rentwest, we understand the stress involved with owning and managing a Perth investment property. As a team of expert property managers, we can help you with everything from the daily running of your property to understanding what tenants want from their rental property. For more information about our property management solutions, contact us on 08 9314 9888 or email us at firstname.lastname@example.org.