How to prepare your investment property for rent
So, you’ve bought an investment property and decided to rent it out? Before you decide to start advertising your property for rent, it’s important to ensure it’s presented in the best possible light. This will not only help to secure good quality tenants on a longer lease, but also generate higher rental returns.
Will you manage the property or use a Property Manager?
One of the first things you need to decide upon is whether you want to manage the property yourself or use a Property Manager. Managing an investment property yourself can be a time consuming and stressful experience. However, using a Property Manager can save you time, reduce stress and is also tax deductible, a reason that most investors like to use a Property Manager.
What rent to charge
Setting a competitive rent for your investment property is essential to your property’s success and your return on investment. It’s therefore best to research the local property market and find out what other similar properties are being rented for to give you an idea of current rental prices. There are factors that can affect rental prices such as supply and demand, location, property facilities, age and what amenities are close by.
Tenant screening for best tenants
As well as setting a competitive rental price for your investment property, you also need to think about the tenants. You want to find tenants that will respect your property, pay rent on time and don’t cause unnecessary hassle or damage.
Furnished or unfurnished
You also need to decide whether you want to rent out your investment property as furnished or unfurnished. Some landlords will have the property part furnished, where tenants will have a washing machine and dryer and the tenant will then need to provide their own appliances and furniture such as a fridge and freezer, bed and lounge. If you choose to furnish your investment property, then this allows you to charge a higher rent. For many tenants looking for their first rental property, this can make renting easier and approachable due to not having to buy new furniture.
When advertising your property for rent, it’s essential that you present your investment property in the best possible light to make it much more attractive for potential rental tenants. This means cleaning and tidying it up and providing high res photos to be used in marketing material. You should also ensure that the investment property remains clean and tidy when inspections are held to create the right first impression.
Landlord and building insurance
It is important that when you rent out your investment property that you take out landlord insurance and building insurance to cover you from things like loss of rental income as well as damage from fire, theft, storms and floods. To get the best deal, it’s worthwhile shopping around first to compare different policies and purchase the policy that best suits you.
Tax deductions for your investment property
One of the advantages of renting out your investment property is the number of tax deductions you might be eligible for. Having a good accountant will ensure you will be claiming all of your deductions, helping to reduce your taxable income. Some of the most common tax deductions include:
- Advertising for tenants and property management fees
- Loan interest and ongoing loan fees
- Council rates, land tax and strata fees
- Building depreciation plus depreciation of fittings and fixtures like stoves, carpets and hot water heaters
- Repairs, maintenance, pest control and gardening
- Building and landlord insurance
- Stationery, phone costs and any travel to inspect the property
- Accounting or bookkeeping fees.
The 2017-18 State Budget also made some changes to what tax deductions you can claim. Property investors are no longer allowed to claim travel expenses to visit their property and there are also restrictions on depreciation. It’s best to check the ATO website to learn what you may be eligible for.
Make repairs first
Before you go renting your investment property out, it’s a good idea to make any repair work first before you get tenants in, as this could save you from bigger and costlier problems in the future, especially on an older property. You want to make sure your property is in the best possible condition so any tiny repairs that can be made such as fixing a shelf or adding new blinds will make your property much easier to rent and could also fetch a higher rental price.
Get in touch
To learn more about preparing your investment property for rent or to learn where you should be buying an investment property in the first place, it’s best to get in touch with the Successful Ways. Our expert Property Consultants will be able to assist you with any queries you might have.
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