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Low-Cost Options To Increase Rent

There are many expensive ways of increasing market rent, but Mark Honeybone reveals there are cost-effective options too.

By: Mark Honeybone

31 May 2018

These days regulatory change costs and rates (which cost more than a few years ago) bring down the yield on a property. That is unless you increase rent. Recently rent has been increasing due to a lot of new regulations coming in that increase landlords’ costs. If “ring fencing” comes in, rents may increase again. These are factors that property investors have no control over, but there are many others they do.

A landlord can increase rent after updating the property’s value by, for example:

  • increasing rooms
  • adding a cabin attached to the premises
  • adding minor dwellings
  • turning it into a room-by-room proposition and furnishing
  • doing a full renovation.

Of course, there are many other options, but the above gives you an idea of what I mean.

Not every landlord has the funds to make these big changes, so how can you increase rent without putting $5,000 or $150,000 into your property? Here are some ideas that may cost you a little or nothing at all:

Clean Before Advertising

This is an opportunity to raise the rent, especially if you don’t raise the rent as regularly as you should. Do it between tenancies. Before advertising and showing people through, make the place look tidy and smell clean and make sure everything works.

‘Before advertising and showing people through, make the place look tidy and smell clean and make sure everything works’

If a prospective tenant is looking at the property and something doesn’t work (or is broken), they won’t be impressed. If you can afford a fresh coat of paint for the lounge, it may be an inexpensive way of enhancing the property and adding the “feel-good” factor to it. Make sure the lawns are done and hedges are all trimmed back nicely.

Rent At The Right Time

This can differ depending on location. For example, if February is the most popular time of the year for people to look at rentals (this may be because of university returning), then you should aim to have your fixed tenancies finish around that time.

There is nothing better for a landlord to see than 20 people attend an open home to rent, potentially creating a bidding war, which then creates a higher rent price.

Put The Rent Up Regularly

often see property investors who don’t treat their portfolio as the business they should. Landlords who don’t use property managers often don’t keep up with the rental market and don’t increase the rent when they should. You can keep up to date with the help of your Property Investors’ Association as well as information on the internet, including the Tenancy Services website, which states latest rent amounts for bonds lodged. This provides current information giving you high and low rent amounts. Talk to property managers and hire one to get a tenant for you. Some will take care of this aspect for a fee.

Allow Pets

Most landlords state that they don’t allow pets, I put “pets negotiable”. I had a fantastic tenant with a cat. By restricting your listing with this condition, you may miss out on a very good tenant.

Recently I moved my family to Auckland, and we needed to rent while we were deciding where to settle. We had our 10-year-old cat with us. The landlords who didn’t allow pets missed out on a great tenant who always keeps his house clean and tidy, pays rent on time and is happy to pay the crazy-high rent in Auckland. And they missed out because of a cat that doesn’t create any issues.

Don’t dismiss a possible perfect tenant. You will still get a chance to vet them. Also you can potentially increase the rent because of it.

Property Ventures is a licensed Real Estate Agency that specialises in Investment property throughout New Zealand. They also have the NZ Property podcast/YouTube series where Mark interviews the property experts from around the country helping hundreds of thousands of investors. He can be contacted at [email protected] or 0800 NZPROPERTY (697767) Or watch the Podcast/YouTube video at www.propertyventures.co.nz/podcasts

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