4 tips to boost your rental yield

rental yield

All investors want a good rental yield for their investment. To gain the best from your property, it’s important to regularly review how you’re managing it and if there’s more you can do to gain a higher income.

Here are four simple ways from the One Agency Orange experts to maximise profit on a rental property.

1. Renovate

Often renovation projects have to wait until you have a short window between tenancies so budget and prepare for that in advance. Getting everything in place so you’re ready to go as soon as that tenant-free time begins will minimise downtime between tenancies and the loss in rent that brings.

Painting and floorcoverings are considered by legislation to have an average lifespan of seven years. Old painting and floorcoverings can also reduce the amount that you may recoup from your tenants if they damage walls or floors during their tenancy.

Kitchens are the heart of a home. While they are a larger ticket item when it comes to renovations, there can be affordable ways to replace or upgrade a kitchen between tenancies. Trades and your property manager can work with you within your budget to achieve a result that can improve the value of the property.

“A new kitchen is also a clean kitchen, and a clean rental is very appealing to tenants”saysSimone Fogarty, Senior Property Manager at One Agency Orange.

“If you can’t afford a complete renovation, think about a thorough cleaning.

“Other simple upgrades are fixing up or changing the most worn items in the kitchen such as cupboard fronts, the stovetop, rangehood, window treatments, or sink.”

Bathrooms. Many Australian states have requirements for water efficiency and water-saving devices. If you have to update for those, consider adding a bit more to the update budget and take advantage of the rental downtime to undertake this work.

“Bathrooms are important to tenants,” says Simone. “It’s a worthwhile investment to do a complete renovation, however you can also just install modern fittings and give this room a thorough professional clean too to liven up a tired looking bathroom.

“Update the taps, towel rails, shower heads, and light fittings for a quick refresh. Replace a cracked shower screen or vanity if you can afford a bit more or look at some of the great tile paints on the market if you don’t want to retile.”

You will have to be realistic about safety concerns as failing to address these could become a major problem. If a shower screen or toilet is badly cracked, for example, it’s a safety issue and will have to be replaced.

“Having the bathroom regrouted is also an excellent way to give it a quick makeover,” advises Simone. “It’s amazing the difference getting rid of any old mould stains makes. Those contractors can often supply a deep clean too.”

2. Outdoor upkeep

Outdoor areas continue to be an important feature for many tenants. But while people are spending more time outdoors, they want to spend less time maintaining it. Installing low-maintenance, native plants can reduce the amount of work needed to maintain gardens for those that don’t have a green thumb. 

Consider employing a gardener or lawnmowing contractor to maintain the lawns and gardens. Attend to the property every 3-6 months to keep any tree trimming under control.

Consider installing a water sprinkler system so the gardens will always be watered in the right ways. Not every tenant knows how to maintain a garden despite their best intentions. If you’re going to replant, it’s an excellent time to also install reticulation which can be set for a new garden then adjusted each year when it becomes established.

“These are worthwhile investments in your property that can be offset by higher future rent because the property’s grounds will always look great, even after many tenancies,” says Simone.

Take a fresh look at your property’s street appeal. If it’s looking tired, you could hire a gardener to give it a thorough tidy up or makeover, or paint the fences and front wall for an instant visual lift.

“Always replace an old letterbox,” suggests Simone. “It’s one of the first things a prospective tenant sees that can send a signal about how well maintained the property is and if it’s going to be a pleasant place to live.”

3. Rent Reviews

You should be having a regular rent review of your property’s market value to make sure you’re getting the highest rent you can.

“A professional property manager will monitor the market value of your property and keep the rent at the right level,” says Simone.

“If you manage your property yourself, spend a month or two researching the latest rents in your area so you can determine if you’re charging enough. It will pay off in the long run to keep ahead of market changes.”

If you can afford any potential rental downtime, you could also consider testing the market by raising the rent and gauging the market response.

“Be careful raising the rent on an existing tenant, though,” advises Simone, “as the pushback may be too hard and you could end up with no tenant.

“It’s best to be cautious and well informed about rent increases for this reason. Make sure you’re getting professional advice and have thoroughly done your homework.”

4. Get a Tax Depreciation Schedule

Investing in property can be a lucrative venture, but ensuring you maximise returns is key to long-term success. One often overlooked but highly impactful strategy is having a Tax Depreciation Schedule in place for your investment property. Here’s why it’s crucial and how it can save you thousands.

Deductions. You can claim significant depreciation deductions each financial year with a Tax Depreciation Schedule that can amount to thousands of dollars, effectively reducing your taxable income and putting more money back in your pocket.

Boost Cash Flow. By reducing your taxable income through depreciation deductions, you improve your property’s cash flow. This extra cash can be reinvested into your property or used for other investment opportunities, ultimately helping you grow your wealth.

Enhance Rental Yield. Improved cash flow translates to better rental yields. By lowering your expenses through depreciation deductions, you can potentially increase the profitability of your rental property, making it a more attractive investment option.

There’s a common misconception that tax depreciation schedules are only worthwhile for new properties,” advises Simone. “This couldn’t be further from the truth.

Both new and existing properties can benefit from depreciation schedules as they account for the wear and tear of assets over time.”

Expert Guidance. If you’re unsure about how to implement a Tax Depreciation Schedule for your property, seeking expert advice is crucial. Professional property managers like Simone can provide a personalised depreciation assessment tailored to your property, ensuring you effectively maximise your deductions.

Having a Tax Depreciation Schedule for your investment property is not just important—it’s essential for optimising your returns. By claiming depreciation deductions, you can save thousands, improve cash flow, and enhance rental yields, regardless of whether your property is new or existing.

Don’t miss out on this valuable opportunity to maximise your investment returns. Reach out to Simone for expert guidance on implementing a depreciation schedule for your property and start increasing your rental yield today.

Need more information?

Knowing the market, understanding where your property sits right now, and what changes will bring you a higher rental income takes years of experience to accurately predict. The stress-free option is to place your property in the hands of a professional property manager who will personally manage your property portfolio.

Come in for a chat with Simone or to meet the team at our office in Summer Street or call us for a no-obligation conversation about how we can help you achieve your property investment goals.

We’re Orange’s friendliest and most energetic agency. Our service is all about making your real estate experience as stress-free as possible.

02 6362 9560 | admin.orange@oneagency.com.au | Suite 7/230 Summer Street Orange NSW 2800