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Chasing higher rental yields? Try one of these four simple tricks

Rental Property Property Management

Property Brokers 21 Mar 2017

Upwards chart with home growth and coins in dirt.It’s a good time to be a landlord in New Zealand: capital gains over the last few years have left many with strong equity in their portfolio Meanwhile, TradeMe data has revealed that average rents across the nation are performing strongly too.

Read more: Learn which renovations will maximise your rental return

However, the averages are just that—averages. If you’ve noticed a portion of your portfolio not quite meeting the standard you expect, or you just want to make the most of this excellent rental environment, then it’s time to step up your game with these four simple tricks:

 


 

1. Know your audience—and appeal to them

 

Every region of New Zealand attracts a different kind of tenant. Canterbury is popular for families with children, for example, while the West Coast is a hit among single-person households. These demographics have different wants and needs from their homes, and the landlord that fails to tailor their property could be missing out on an additional rental yield.

Here’s how that works practically: if you have a smaller home on the West Coast, then design your interior to be perfect for just one person, and adjust the rental ask to account for a single income.

On the other hand, if you have a place in Canterbury that would be ideal for a growing family, you may want to highlight proximity to schools, or convert / add an extra bedroom for any new additions to your tenants’ family.

These small changes could be the clincher for a higher rent or a better tenant—both are valuable assets for any landlord.

 


 

2. Go back to basics with creature comforts

 

What do you think is the most basic function of a rental property? It’s to give somebody a comfortable and warm place to live—it’s not just four walls and a roof to keep the rain off, it’s a structure that should be designed and updated with your tenants’ health and comfort in mind.

By now, you should know the requirements of the new laws regarding insulation statements for your property. This shouldn’t just be considered an unnecessary piece of bureaucracy—the fact is that renters care about how warm and dry their homes are, and about half of them consider their homes damp and cold, says Statistics New Zealand.

If you’re finding it hard to retain good tenants or find new ones, consider going back to basics and making sure your rental property is warm, dry and comfortable for the people who live there.

 


 

3. Don’t sniff at sweat equity

Ever watched The Block and wondered if you should try your hand at your own renovations? DIY is a part of the Kiwi mindset, the humble shed being closer to a mad scientist’s lab than just a storage area. But you don’t need to bust out the jackhammer and start tearing down walls to get better value for your investment property.

Sweat equity, or the act of improving a home to increase value and yield, can be as simple as a new lick of paint for the walls, a touch up on the varnish for the deck, a quick prune of the garden, or any one of the hundreds of common maintenance tasks that sometimes fall by the wayside. A fresh look for your property could be enough to attract a higher rent and improve your yields.

 

Want more information about the renovations that will improve your rental yield? Check out our rental renovations guide.

 


 

4. Avoid tenant churn and burn

If you’ve ever worked for a company that has a large staff turnover, you’ll know that it can be a difficult situation for everyone involved—and it doesn’t make much business sense either. It costs a great deal to onboard a new staff member, and every day of training a new person is another day of non-productivity.

The same is true for your property. If you keep bumping up the rent too often, too much or both, you can find that your tenants don’t stick around for long. It might temporarily increase your short-term yield, but you may consistently have vacancy periods of a week or more—unproductive days where your property isn’t contributing to your cash flow and is diluting your yield.

 

Extend the lifetime of your tenant's tenure by choosing the right type of tenancy agreement.

 


 

It’s a great time to be a property investor in New Zealand, but don’t rest on your laurels: These four simple tricks could be the key to improving your portfolio.

Stop worrying about getting the wrong tenants. Arm yourself with the knowledge you need with our free ebook below.

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