Why Am I Not Getting Higher Rents?

So you've bought a great a property and it's been rented out for awhile, but hang on, why am I not getting more rent? The value of the property has increased, so shouldn't the rent?

Recently I looked at how to increase the rent without losing tenants. Now here's a look at why you may not be able to increase the rent, even if you wanted to.

Your property needs some love

If your property is not looking sharp, then you will not get rent increases. There will be no competing tenants for your property if the paint is peeling, the carpet is threadbare and the yard is overgrown. Spend some time and money on making it look the best it can be.

How to get into the Property Game

With 2013 right around the corner, a lot of us are thinking about what we plan to do to make it the 'best year yet'. Maybe you are considering trying your hand at property investing (if you haven't already). You may be a little overwhelmed with the amount of information that is out there and you are looking at making the leap, but you don't know where to start.

Here are a few points to consider:

1 - Make sure your job is secure

The economy is recovering and there is a lot more confidence in the market. Hopefully that translates to your job. If you are looking at using banks as your primary source of mortgage funding, then you will need to show them that your job is nice and secure, and that it's not likely to end anytime soon. (That is a little like crystal ball gazing.)

Capitilising on the Holidays

We're heading into Christmas, we're all tired and scratchy and would really like a break. But is that the best idea if you are a real estate investor?  You could use this time to your advantage and capitalise on everyone else taking a break.

Maybe this year consider taking your holiday in the middle of the year and use this time to fortify your position instead and take on the new year with a bang!

Competition

Since everyone else is hitting the beaches and the market slows down until about February, this is a fantastic time to negotiate. Make offers from late December to mid January and you might just swing yourself a good deal because there are no other buyers around. 

More Renters Means What?

This figure was from 2011, and it's still growing!

There is a trend in Melbourne: there are more people renting. This is likely due to the economy and uncertainty. There have been changes in the housing market of late, with sales on the uptake, but over all renting is very popular and looks like it's becoming more so.

Australian Census data (from 2011) shows that although the number of homes being purchased or owned was higher than in 2006, the proportion of the number being owned has dropped from 70% to 67%. Keep in mind that these figures are from last year, and no doubt that trend is continuing. 

Rent Guarantees and Off-The-Plan Purchases

Here are a couple of incentives, that look great on paper, but you do have to know what you are doing. These are offered by developers to get you buying.

Rent Guarantee

A rent guarantee is just what it says. The property developer will guarantee a certain rent rate for a period of time - often 2 years. This seems like a fantastic idea if you are a little worried about the deal. But beware, you are paying for it in the long run.

Investment Property Red Flags

When buying an investment property, there are factors that you need to consider to ensure the property is a good deal.

Today we are looking at the 'RED FLAGS' and it more often than not comes down to numbers.

You know doubt are aware of how supply and demand impacts property: you are looking for a property that will provide good capital growth, in an area where the supply of properties is low, and the demand for living in the area is high. 

Yes, We're talking about Nightmare Tenants!

How could you get through the door?

We don't  like talking about it, but it happens. (I think we all know people in the category of 'I tried it once, it was awful, so I'm never doing it again!')

The nightmare tenant. It usually happens when landlords self-manage their rental properties and due to inexperience or not being a 'tough nut' end up with a tenant (or tenants) who are less than desirable.

So what are the common ways tenants can be a nightmare:

How to Raise The Rent, WITHOUT Losing Tenants

You are in the rental property game to make money. So how do you successfully raise the rent WITHOUT losing your tenants?

First things first, in Australia make sure that you have a clause in your tenancy lease agreement that stipulates the increase or the method of calculating the increase!  Without this there is no legal way to go about it.

A lot landlords think the only way to raise rent is to wait for tenants to move out - but this is not the case. If you handle it carefully and sensibly, you won't necessarily lose your tenants and you will be increasing profits. It can be a daunting task for some landlords as they don't want any confrontation, don't want to rock the boat, don't want to deal with tenants moving out or maybe they are too friendly with their tenants! However, if you want to increase your profits, it has to be done. There is a right way of going about it.

How do you minimise Tenant Turnover?

Note the smile on the tenants faces!

The key to minimising tenant turnover is keeping a tenant happy. It really doesn't take all that much to do that. I wrote about the cost of tenant turnover the other day, now we talk about keeping them. 

I wrote a post a few months ago about the topic which highlights a few 'above and beyond' activities that some landlords find useful in keeping tenants happy.

The key I feel in tenant retention is professionalism!

Yes, it may be self serving, but a very experienced property management company who has 'seen it all before' is your best bet. I know where you can find one…Here! 

But bottom line to happy tenants is respect: