Professionals Richmond A recent report has confirmed that in recent years, the Australian property market has experienced a slow down in the growth of rental returns.
The latest CoreLogic RPdata 2015 Capital Markets Report has found that rental rates are rising at their slowest pace since June 2003.
Over the 12 months to January 2015, weekly rental rates have increased by just 1.7 per cent across the combined capital cities and this indicates that rents are now increasing at their slowest pace since June 2003.
The report also found that rental growth is limited for both houses and units although unit rents have increased at a faster pace over the year (2.2%) than house rents (1.7%).
It found that across individual capital cities, rental rates still increased in most cities however, Perth, Darwin and Canberra all recorded falls in rental rates.
At the end of January 2015, the typical capital city house had a gross rental yield of 3.6 per cent and the typical unit yield was 4.5 per cent. At the same time 12 months earlier, rental yields were recorded at 3.9 per cent for houses and 4.7 per cent for units.
With rental yields now under pressure, boosting rental returns is now a key issue for the owners of the rental properties and those looking to invest in property.
At Professionals Tripodi & Associates we are finding that rental properties with a high level of security are now much easier to lease and tend to have a higher rental return. Those homes that have security doors and security window locks are much more desirable for a tenant. Other ways to increase security for a tenant can include installing a garage door on an existing carport or erecting a fence.
Installing an air-conditioning unit as well as a dishwasher are two other key features that prospective tenants increasingly want in a residential property. Reverse cycle air conditioning systems are the most popular with tenants because they allow for temperature control during both the summer and winter months.
The property should also be well maintained. For example, if you own a suburban property with a garden, it good idea is to ensure that you have a gardener contracted to maintain the outdoor areas. These expenses can be built into the rent and engaging a contractor to maintain the gardens ensures that they are always maintained. Rental properties with poorly maintained gardens are more difficult to lease and achieve a lower rent compared to similar property with well maintained gardens.
Landlords can also boost their rental returns by considering leasing their property to a tenant with a pet. Often landlords shy away from having tenants move into their property with a pet, however these type of tenants will generally pay a high rent to secure a rental property. In South Australia, landlords cannot ask for a pet bond from the tenants, however some landlord insurance policies will offer cover for pet damage.
The property market may be experiencing slow growth of rental returns, however with some simple ways to make your investment property more appealing to current and prospecting tenants, you can help minimize the impact of this market trend and improve rental returns.
For more information on leasing your property, please feel free to contact an expert from Professionals Tripodi and Associates, on 8352 3444 or reception@saprofessionals.com.au