In the world of property investment, a generous and consistent cash flow is the key to success. While capital gains are a financial bonus, rental income is what keeps you up to date with mortgage repayments and helps you to reinvest and secure your financial future.
Every property investor should aim to boost their rental income on a regular basis. An extra $20 a week gets you more than $1,000 a year, making the effort worthwhile. Rental income can be increased through a number of methods, some of which are very simple and inexpensive.
1. Raise the Rent
This is perhaps the easiest and most obvious way to boost rental income, but some landlords don’t do it often enough. You should review the rental market on a regular basis to ensure your rent is in line with current conditions. Rent can fluctuate surprisingly quickly, so it’s important to keep track of it and benefit from the increases.
Some landlords are hesitant to raise their rents because they are scared the property will be vacated. But tenants realise rents go up according to market value. If they left, they would have to pay the same price or more elsewhere.
Other landlords don’t want to raise their rent because they like their tenants. It’s important to remove emotion from the situation and consider the consequences of losing thousands of dollars a year due to this hesitation.
2. Upgrade the Property
Improving your property can increase its value and enable you to raise the rent. It could be as simple as repainting or tidying a garden. If necessary, you could even conduct full-scale renovations. Remember to target the local demographic with your upgrades. For example, building a fence can attract families.
Low-maintenance gardens and neutral colours are the best ways of appealing to the widest range of people. Two areas tenants pay extra attention to are the kitchen and bathroom. While these areas are expensive to work on, new fittings and fixtures can significantly increase the overall value of the property.
3. Add Extras
Once again, these extras should target the specific demographic your property is in. For example, a car space can be a make or break for many renters in busy, inner city suburbs where parking is rare and expensive.
You could also convert a second lounge area into an extra bedroom or create extra storage space and wardrobes. Think about what’s missing in your property and others in the area that tenants would pay extra for. It could anything from security to soundproofing or a laundry.
4. Allow Pets
Pet-friendly homes are in high demand everywhere in New Zealand. Don’t underestimate what people are willing to pay to live with their pets. Pet-friendly properties can get you anywhere from $20-$50 more in rent every week. It also creates goodwill with your tenant.
Property owners who are worried about damage can protect themselves by adding a clause in the tenancy agreement. This could make the tenant responsible for carpet cleaning or other pet-related damage.
5. Refinance Your Home Loan
Boosting your rental income can be as simple as refinancing your home loan. You should regularly compare your home loan to other products on the market, regardless of how long you’ve had it.
Different lenders are always coming up with new and competitive home loans that could save you thousands over the remainder of the loan term.
Explore Your Options with iLender
If you need more advice about boosting the rental income of your property investment in New Zealand, our team can help. Our Auckland based mortgage brokers will help you achieve your goals in the New Zealand property market, whether you’re local or an overseas property investor.
Call us today on 0800 LENDER (0800-536-337) or contact us online.
