You’ve made the decision to purchase an investment property, and you’re ready to tackle your new role of ‘landlord’ with diligence and enthusiasm. So it would make sense to buy the property first, then hire an agent, decide on the rent and interview tenants – right?
No, actually. If you want to attract the ideal tenant, it’s quite the opposite.
1. Purchase the investment property with your ideal tenant in mind
Before you purchase your investment property, it pays to think about who your ideal tenant is. Are they a professional couple, a family, or someone in their older years? Once you have a firm idea of who you would like to rent to, you can start to put yourself in the tenant’s shoes and think about what the property should offer.
If your ideal tenant is a professional person, look for properties with good access to transport, an easy commute to the nearest CBD.
If you prefer a young family, then schools, kindergartens, shopping centres and sporting facilities will be on the menu.
2. Presentation pays off
The best tenants are not likely to be impressed by a mouldy smell coming from the wardrobe, or a bright yellow toilet seat from 1970. Try to make some inexpensive improvements if you can, and present the property as a clean and comfortable home. Ensure that everything is in good working order, and try to keep colours neutral.
3. Price for the market, don’t increase the rent too much
Research other properties for rent in the area, and price your rent accordingly. Once you do manage to find that dream tenant – don’t increase the rent too often, or too much. This will only encourage tenants to look elsewhere.
A $10 per week rise might seem like a good idea in the long term, but if your property sits empty for months between tenants that will represent a far greater loss.
4. Screen agents and tenants carefully
Before you sign up with a real estate agency or property manager, find out about their track record and the way they like to do things. How do they handle complaints about the property, or tenants who default on the rent? How often will they carry out inspections?
Make sure they have a rigorous process in place for screening tenants, and make your wishes clear from the beginning.
5. Invest in landlord’s insurance
If all else fails, landlord’s insurance can really save the day. Make sure you invest in a good insurance policy that covers you for any damage by tenants, unpaid rent or liability claims.