How to attract and keep great tenants
Investing in property has many financial benefits – if it’s done right. You’ve all heard the adage ‘safe as houses’, because property is almost guaranteed to increase your wealth. From rental income to tax benefits, an investment property can bring in more income than outgoings short-term and capital growth should see investors benefit significantly long-term.
First things first, you need to understand the suburb you are buying in and analyse its supply and demand. At D Residential Group, we do a lot of research into the suburbs our clients are interested in to ensure their financial goals can be achieved. I believe the right location is crucial in determining success while building your property portfolio, so before you buy, please do your own research or contact me for advice.
Once you’ve purchased your home, the most important task of all begins – finding the ideal tenant. Here are some key dos and don’ts when you’re tenant shopping;
Screen thoroughly before selecting your tenant
In a dream world the perfect tenant would find you, but from my experience, that truly is a dream world. A great tenant comes from thorough screening, including employment checks, previous rental references and national tenancy database checks. This can be daunting, which is why a local property manager with time and experience to conduct these checks is a smart move.
Meet your tenant face-to-face first
This may not be realistic where you live thanks to COVID-19, but in Perth right now, we can and do meet tenants on behalf of our clients to ensure they’re the right fit. You place a lot of trust in your tenant to take care of your property and make their rental payments, so meeting them will provide a much more genuine experience of their character. Another benefit of a good property manager is we do this leg work.
On the flipside, I look after all my amazing tenants too so if they have to vacate a property, I will do my best to offer them another rental option.
Maintain the property to a standard you would expect in your own home
Reality alert! Even properties you don’t live in will have extra costs attached. Maintenance fees are inevitable for property investment (although most are tax-deductible), and fixing things in a timely manner will make a big difference to keeping your great tenant happy. Once you have a good tenant, you want to keep them because continual turnover of your tenant will be more work and money than calling the plumber or electrician. Show compassion – it’s your property, but it’s their home.
Negotiate over rent increases
If you have a great tenant but feel the property’s rental value is higher, discuss a potential rent increase respectfully. Consider going through an agent (I know a good one, wink), who can negotiate on your behalf to get the best deal for all parties. Sometimes, accepting a slightly lower rent within a great tenant’s budget is a successful outcome. I’ve been both a renter and a landlord, and know that calm communication, honesty and respect always work.
Follow through on promises
Whether it’s repairing a leaking tap or extending a lease, stick to your word and you’ll create a harmonious environment for your renter. It works both ways too, so try and get all promises in writing to avoid any confusion.
Engage a property manage who cares
You deserve a property manager who cares as much about your property as you do. I always go the extra mile to understand and achieve my clients’ financial goals, while working respectfully with tenants to ensure their needs are met, too. Ultimately, I work hard to foster a peaceful and beneficial relationship between all parties. To see how I can assist with your investment, call me on 0402 888 550.
You might also be interested in
Nov 7, 2023
Preparing your property for professional photos
As a landlord, you understand how important it is to present your rental property in it's best possible light. One way to do this is by investing in professional photography. By showcasing high-quality images, you stand a better chance of attracting prospective tenants. But how can you prepare your rental property for professional photography? Here are some tips and tricks: 1. Tidy up and declutter Make the space you are photographing look as clean and tidy as possible. Remove any clutter that might look distracting in photos. Clear countertops, shelves, tables, and floors as much as possible. Following the philosophy of "less is more" can make the space feel bigger and more inviting. 2. Use natural light Optimal lighting is always the preferred approach when capturing photographs. Opening blinds and curtains to let natural light in is an effective way to show space. If natural light is not available, consider bringing additional lighting to properly illuminate areas that may be dim. 3. Dress up the space Style your property as you would for a open home showing. Add items such as fresh flowers, pillows, or additional props to help enhance the décor. Cute dining settings, staged seating areas in the living room and so on. This is to show prospective tenants how they can utilise the space and helps them visualise their future home. 4. Take exterior shots The exterior of your rental property is the first thing prospective tenants will see. Ensure the front is trimmed, weeded, mowed and organised before photographing. Aerial photographs and photographs that focus on your property’s standout features such as a pool, outdoor fire pit or BBQ area, can provide great selling points to your property. A well-designed and thought-out photoshoot of your rental property is an investment. It can attract the right people to your property and increase your rental yield. You only get one chance to make a first impression, so make sure you take the time to showcase the rental property in the best possible way.
May 4, 2023
Are you tax compliant as a property investor?
With tax time fast approaching, it’s essential to know what investment property expenses and income you will need to declare on your tax return in relation to your investment property. Investment property tax can work in your favour to reduce your overall tax bill and offset the cost of owning an investment property, but there are potential pitfalls to avoid. Take a look at what you can claim and why you need to be careful before you submit investment property expenses in your tax return this year. Investment property tax benefits There are plenty of costs your investment property allows you to deduct at tax time. Here are a few of them, according to the ATO website: advertising for tenants body corporate fees and charges council rates water charges land tax cleaning gardening and lawn mowing pest control insurance (building, contents, public liability, loss of rent) interest expenses prepaid expenses property manager fees and commission repairs and maintenance legal expenses depreciation on goods at the property Being able to claim these expenses on tax will reduce your overall holding costs and can push you further towards being cash flow positive. A reliable property manager will help you keep a record of each expense, and a good tax accountant will help ensure they are included in your tax return. Take note: your Perth property must be tenanted or at least actively available for rent if you wish to claim any deductions when you process your tax return. You also can only claim rebates for expenses that relate to the income production of the property and not to your personal use. See the ATO website for more information. You also need to declare the income you earn from your investment property. This includes rent paid to you as well as AirBnb fees, money earned from leasing a room, or leasing your place to family and friends at less than commercial rates. It also includes income relating to capital gains. Again, you’ll find information on the ATO website. 2023 ATO landlord crackdown This year, the Australian Taxation Office (ATO) is set to take a close look at investment property expense claims and income declarations. Reports say the ATO is expected to scrutinise 1.7 million Australian property investors, including those in Perth, using a new data-matching program. Agents from the ATO will be able to access account information from seven of the major banks, including ANZ, NAB, Westpac and St George, to confirm investors’ income and expense claims. This has come about after estimates showed there was a net tax gap of $9 billion in the 2019-2020 financial year, of which up to $1.3 billion may be related to landlord expense claims and failure to declare income. The data matching program will be able to collect personal information including loan account and transaction details. Having access to this information will allow the ATO to independently cross-check people’s claims and find out if investors are leasing properties without declaring their earnings. It is also possible that the ATO will be retroactively assessing 2021/2022 tax returns, so now is the time to contact your accountant and property manager to make sure your return correctly reflects your income and expenses. How to stay compliant The last thing you want as a property investor is to be investigated by the ATO because your tax return claims don’t match the transactions in your bank account. As mentioned, you need to work with an experienced property manager who will help you track and record expenses. If you incur expenses without looping in your property manager, keep them on file to share with your accountant. Be honest and upfront with your tax accountant. There are so many things you can claim and this should help you to offset the income you generate from your investment property. If you’re concerned that your tax return may not have been correct in previous years, you can always talk to your accountant about updating it. Do you need help to understand or report your investment property income and deductions? Get in touch today.