Many Australians dream of investing in residential property to build their financial portfolio and create a passive income.
Purchasing a well-located property that offers an enjoyable lifestyle and proximity to services such as transport or schools, is likely to deliver good capital growth and appeal to future tenants.
Usually the same special features that attract a buyer to a property – a leafy view, a sunny balcony or a short walk to the shops – will tick the boxes for those looking to rent in the area.
But to get a good return or steady income from property investment the number one consideration is finding and keeping great tenants. And it’s about much more than just paying the rent on time. Having good tenants means you can achieve a maximum return on your investment in any market.
What are tenants looking for?
Different properties attract different tenants. A three-bedroom home in a leafy suburb such as Tarragindi is likely to attract a family wanting a pleasant lifestyle, convenience and stability. Access to good local schools is a strong driver of family rental decisions so it’s worth promoting proximity to shops and schools when advertising for tenants.
Alternatively, a high-end two bedroom apartment may be perfect for a professional couple or two singles who have the income and ability to prioritise lifestyle and proximity to work.
Some landlords choose to focus on a particular area in order to attract a particular demographic of tenant – a student near a university, or medical staff near a hospital. But having a quality property that attracts renters across different demographics usually means a bigger pool for landlords to choose from.
The importance of property managers
The first step in finding a good tenant is to employ an experienced property manager. Good property managers are armed with local knowledge, market information on pricing and demand, and a database of tenants they may have leased to in the past.
A good property manager will act as your gatekeeper and as well as promoting the property widely, they will check previous tenancy history and references to ensure you only ever get a reliable, trustworthy tenant for your property.
But the relationship shouldn’t end there. A property manager will provide reliable, stress-free management throughout the tenancy. At Place, we believe it is the property manager’s job to handle every aspect of management of your property so that tenants are happy, and landlords don’t need to give it a second thought. This covers everything from tenant selection to maintenance and repairs, communication, inspections, and advising on improvements to increase appeal or value, and rent increases.
What makes a good tenant?
A good tenant pays rent on time, takes care of the property, is easy to deal with and is a good neighbour.
But you can’t have a good tenant without a good landlord. A good landlord recognises the value of a good tenant and acknowledges and addresses tenants’ concerns quickly. They respect the tenant’s privacy and give enough notice when a property inspection is due. And most landlords realise they need a property manager to help them attract and retain tenants.
When these two components come together – good tenants and good property management – the rental experience is positive for both sides.
Keeping a good tenant
Once a good tenant has moved in, there is plenty the landlord can do to ensure they are happy with their living conditions. At a basic level the property must be safe, secure and well maintained with minor repairs attended to promptly – good property managers will respond quickly and co-ordinate maintenance visits with minimal disruption.
In a rental market where tenants have the luxury of being selective, landlords may find it harder and want to consider ways to maximise rental returns and appeal to tenants. Even minor improvements such as fresh paint, carpet, or air conditioning and dishwashers can help secure a tenant faster and keep them longer. [Link to investment property article]
And, when the time comes to renew the lease, it’s far easier to re-sign a good tenant than start the search over.