5 key tips to attract your ideal tenant
Many property investors think that by handing over their property to a property manager will result in getting the best rental return. However, this isn’t always the case. There are cases where rental properties stay vacant for long periods, and/or if they are finally rented out, the return is disappointing. We believe that there should be some intentional effort on the Landlords’ part to ensure the best possible outcome for his/her investment property.
One of the critical factors in getting a higher rental return is to attract the right tenant that will pay a premium for the property. This blog will discuss five (5) key tips that will equip investors with the tools needed to attract their ideal tenants.
TIP # 1 Meeting The Basic Needs Of Your Tenants
Are you meeting the needs of your tenants?
When it comes to renting successfully, we can all agree that the main goal is to retain and attract quality tenants and reduce the vacancy rate. If your property presents well, it will be very marketable, and it encourages more extended rental stays.
One of the ways to achieve the above is to care for your tenants. You can do this by ensuring that the property is well maintained before move-in and during the length of their stay. In return, tenants will have greater respect for you, which will translate to better care of your property.
When your tenants make a reasonable request, put yourself in their shoes as if you were living in the same situation.
Requests such as fixing up a broken air conditioning unit, installing proper blinds or safeguards for balcony or stairs are common requests.
It is crucial to address tenants’ requests or concerns promptly.
In the case where you have to say no to a tenant, you should still notify them and give them the proper reasons for the rejection.
Aside from attending promptly to maintenance and item requests, consider also the physical quality of the property.
Ensure the building is of reasonable quality and has the right furniture to match for furnished rentals.
Whatever you skimped on in the beginning, may end up costing you more down the line, i.e. major breakdowns, high maintenance cost, complaints, and extended vacancy rates.
Everyone deserves to live in a comfortable home.
As landlords, you have the responsibility of ensuring that you provide a safe and liveable environment. In return, the efforts will pay off with lower vacancy rate, possibly higher rental, and extended rental terms for your property. Furthermore, you will have less complaints to deal with.
TIP # 2 Leveraging on the 5 Key Locations & Services around your Investment Property
Location, location, location
When it comes to property investments, it is essential to consider the location. Because unlike the property itself, the location is permanent.
When tenants are looking to rent, they will also look at what the location offers. The following are 5 key amenities and places that will increase your property’s marketability.
Key Amenities and Places:
– Parks, beach, sports centres, gyms
Lifestyle and Essentials
– Shops, Restaurants and Cafes, Banks, Grocery stores
– Bus, Train, Tram, shared car services
– Hospitals, Medical clinics, Dental clinics, Physiotherapy clinics
– Universities, TAFE, High Schools, Primary schools, Childcare Centres
The proximity to these amenities and places could increase the demand for your property.
Therefore it is essential to do your research of a location and not just rely on what you hear from people or the news.
Learn about the suburb’s demographic as well; this way, you could deduce which facilities are significantly more relevant to your prospective tenants. Then, note the distance to these facilities, for example, the walkability to them.
Having a thorough knowledge about a location could help you determine the viability of an investment, as well as, allow you to market more strategically.
TIP # 3 Ask and Know your Ideal Tenant Market
Renting Out Your Property
One of the most important steps to increase the rental value and occupancy rate of your investment property – is understanding your tenant market. It is a simple but crucial factor that investors often look past when it comes to renting.
3 KEY THINGS TO CONSIDER:
> Ask yourself who your target market is – even before securing a property.
When you’re considering certain postcodes, you need to think about who lives in those areas. As mentioned in the previous tip, look at the key locations, services, and infrastructure in a specific suburb to find out the types of residents living there and those whom it might attract.
Here are some examples of the types of tenants to think about:
- University students
- Working professionals
- Educational staff
- Medical workers
- Corporate executives
- Government officials (local and overseas)
> Ask yourself what the needs of these tenants are?
Each type of tenants will have different needs because they will be at different stages in their lives. The location, size, property layout, and rental arrangement are often the typical considerations taken into account by a prospective tenant. Below are some examples:
- Young couples who are looking to start a family may look for a 2 to 3 bedroom property.
- Parents with older children would be looking for more bedrooms and bathrooms so they tend to gravitate towards larger sized properties.
- Students starting university or TAFE would be attracted to a studio or one bedroom apartments that’s close to their education institutions.
- Executive tenants may travel interstate or overseas on a 3 to 12 month basis so they want to live close to work.
- Medical workers may be on a 6 to 12 month rotation work arrangement and need a fully furnished property that they can move in straight away.
> ‘Ask’ the market for ideal tenants.
When advertising your property on realestate.com.au, domain.com.au or Airbnb; list the features of the apartment and state how it would satisfy certain types of tenants. By doing this, it will make it easier for your ideal tenant to see themselves in your property and help you filter out tenants that are not suitable.
Understanding your tenant market is an important step to maximising your chances of finding a quality tenant and getting the highest possible rental rate. Furthermore, when you know who you want to attract, you can choose the right furniture and décor to furnish your place with. Thus, attracting premium paying tenants.
Ideally, with an investment property, you would want to have a consistent income, on top of capital growth. So, as long as you consider your target market, you should be able to rent out your property with ease.
Source: MORC Images
TIP # 4 Have an Effective Rental Strategy
Finding a tenant with a plan
For the fourth tip we will be looking at how to create an effective rental strategy by incorporating what we’ve talked about so far.
So far we have looked at the importance of meeting tenant’s needs to retain and reduce vacancy rate; how to leverage on the location to increase the demand for a property, and understanding who your target market is when it comes to advertising.
Knowing When To Market
Depending on your target market, it is essential to know when to market your property. For example, if your target market are university students, the ideal time to advertise will be close to the start or middle of the year when tertiary study semesters begin. A quick search on the internet will help you find relevant university semesters dates.
It is also worth keeping an eye on tenancy periods that are coming to an end, (especially if it is around the end or start of a school semester and your target market are students).
You can do this by following up with the tenant and ask if they would like to extend their rental agreement when it expires. And if they do not intend to continue, you will then have plenty of time to advertise for new tenants. By being proactive, you can avoid having to leave your property vacant for too long or at all.
How To Market
In today’s age of technology and social media, it’s crucial to market your investment property in a relevant and appropriate manner to your target audience. Yes, there’s the standard way of taking photos and putting them on the internet and real estate platforms, but that’s not enough anymore if you want to have the edge over your competitors.
There are other effective and creative means of marketing a property now, such as video, virtual tours, and social media marketing.
Especially with the current pandemic, we have to change the way we advertise a property.
Open inspections are no longer allowed in the current lockdown rules, and private inspections aren’t the most time-efficient method when it comes to rental inspections.
Thus, to stand out and increase your chance of getting a tenant quicker than others, you will need to advertise creatively and may need to invest a little more on advertising.
Here’s an example of a recent project that was leased out in 5 days and became the highest renting one-bedroom apartment in the building! The cost of making this virtual tour clip was about $250. See – https://my.matterport.com/show/?m=5LAMktCt2YT
Knowledge Through Research
There is no doubt that research is a big component in all the tips mentioned so far in the rental series. Understandably, it takes effort and can be time-consuming. But it will help you create a more informed rental plan, which would ensure a successful rental result.
If you do not have the time, an experienced property manager that is proactive and tech-savvy could also carry out those tips we’ve mentioned so far. If you are an international investor, it is worth having a property manager. However, it would help if you still did your research into who you’re hiring as your property manager.
Real Case Study:
An investor of ours was struggling to rent out their three-bedroom rental property for two months. They felt like their property manager was over-promising and couldn’t find a tenant. After speaking to us (because we have just furnished their apartment), we recommended a property manager that understood the qualities of the apartment and knew how to advertise to the relevant tenant market. After 19 days, the apartment was rented out at $200 more per week above market value, and the investor couldn’t be happier.
If you’re struggling to rent out your investment property or would like to speak to one of our recommended property managers, send us a message. We will be happy to help.
TIP # 5 Providing the Right Furnishing for a Higher Rent
How to furnish to get a higher rent?
Recap: We have explored the following topics in the last four rental series tips: the importance of meeting a tenant’s needs to retain and reduce vacancy rate; how to leverage on location to increase the demand for a property; understand who your target market is when it comes to advertising; and how to create an effective rental strategy that incorporated all of the above.
Final Tip – Rental series
For the final tip of this rental series, we want to look at HOW to furnish with a target tenant in mind – as this will increase your chances of attracting premium paying tenants (tenants that will pay above-market rent).
An excellent way to start is the location of your property; is it close to a school or an office?
When furnishing for tertiary students, you need to have a general understanding of their lifestyle. For example, they will need a place to study and complete their assignments. Therefore, it’s a good idea to provide a study desk and chair in the rooms. If that is not possible, you can provide a dining table that is big enough and close to a power point so it can also be used as a study area. Alternatively, you can also swap out a bedside table for a small study desk.
If your property is near a business district, chances are your tenant market are working professionals. You will need to ensure you are providing quality and attractive furniture. Executives or professionals are very busy and do not have the time to shop for items, so it’s important to offer more than just the essentials to meet their needs. Styling the property with the right decor and accessories will make your property stand out above the rest in the market.
When furnishing a property, always start with the biggest items in each room – such as a dining table, sofa, or bed. From there, you can then begin to fill in the complementary furniture items.
Higher Rent? Yes, please!
Tenants will appreciate a property that meets their needs. By investing a little bit more and choosing the right furniture, you are setting your property apart from the competition, and thus will attract a premium paying tenant.
And to conclude…
We hope that investors will be able to understand that properties are not just investments but are places where real people are looking to live and call home.
Source: MORC Images
Looking to furnish your property? Have a chat with one of our fit-out specialist at 03 8761 6769 and enquire about our furniture packages!
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