Common Mistakes to Avoid When Setting Rental Rent


It is easy enough to set rent, but experts strongly recommend to seek help from property professionals in order to keep a good cash flow and serviceability throughout their journey.

One of the best ways to set the right rental price is by checking comparable properties in the market. A real estate property manager can do this for you but be ready for the hard sell of the agent trying to win the management listing by offering low fees and providing a high expectation. You can also get appraisal online but you should know that you are giving free property and personal information that can be sold to marketing firms.

Also, the rental prices will also depend on the present supply level and demand in the area.

Mistakes to avoid when determining rent

  1. Automatic rent increase

Rental price should always in sync with the state of the market. But with that being said, owners must avoid the tendency to take the current rent and raising it by a certain percentage without evaluating the present market, particularly if the property experienced a prolonged vacancy or a long-time renter has moved out.  Smart investors are up to date with the present status of the dynamic property market.

  1. Saying no to decreasing rent

Smart investors will not say no about cutting rent if the market demands it. A lot of the times, a shortage in tenant application is due to the fact that the rent could be higher than what the market dictates.

Rejecting a cut in rent may negatively affect the portfolio as the harm in a prolonged vacancy will probably be bigger than just removing a couple of bucks worth of weekly rent. Each week an owner refuses to implement the desired rent is a direct and costly blow to the return on investments.

  1. Comparing apples and oranges

When checking out comparable properties to determine the right weekly rent, I advise investors to look at homes in the same area and with the same features, including the number of bathrooms, bedrooms and car spaces, how old the property is and nearby facilities.

  1. Using rent to recoup expenses

It is not true that determining rent is an economic decision. It is a mathematical one. You shouldn’t use the monthly cost of your property investment as the basis for setting rent. There is no use putting the rent at $450 per week just because it’s the amount required to pay the loan.

Tenants don’t think about that when making the decision to apply for your property. The truth is, they do not care.

 

 Try considering “The tenant frame of mind”.  I seriously urge property investors to put themselves in the tenant’s shoes rather than the landlords. What is essential in determining an accurate rent is to check the present market, utilise free online tools out there, and begin with an expansive search of comparable homes prior to limiting it to specifics.

My final advice to investors is: Heed the market when the home is advertised and react quickly to what it is telling you.

 

Remember, you can always change your property manager if you are unsatisfied with their services and you don’t need to wait until your tenant moves out or their lease ends.  It can be done at anytime!  This is your investment and your business!

Contact us at One Agency Pinkerton Properties if you would like to know how we can best serve you!

Tips to Renovate your Home Without Spending a Fortune

When searching for how to give your home a makeover, bear in mind that major changes don’t need to cost an arm and a leg. The key is identifying what areas need a refresh and how to spend your budget smartly.

Here are five smart, inspired and economical ways for a quick home makeover.

  1. Declutter

A space that is uncluttered looks and feels luxurious. When planning to declutter, identify which items are disrupting your home’s overall appeal. Various free-standing items overwhelms it and minimise air flow, creating a dark and tight vibe.

A useful trick is to look for sets of items, like a stack of books that are consuming the space. When you get rid of these items, you’re letting statement objects, like the couch and art, to become the main focus because the eye will automatically be drawn to them instead of the mess.

  1. New paint

A space looks crisp and clean with a fresh coat of paint. It adds gloss and personalises your home, so choose a colour you like that you can connect with emotionally.

White is still a classic and is the right setting for sharp styling and home décor. Various whites became the craze. The white that you used in 2014 is a different shade to what is currently on trend, so repainting can instantly bring your home up to date.

Another popular shade, grey, is also paving the way for more natural colours and happy hues.

According to the Dulux Colour Forecast 2020, brown is the new grey. Or more specifically, greige, a combination of grey and beige. It contrasts nicely with silky neutrals, earthy shades, and greens. These colours all look amazing in combination with a warmer white.

Makeover an outdated kitchen, laundry or bathroom with a fresh coat of paint that won’t cost an arm and a leg. You don’t have to hire a tradesperson as painting is easy to do yourself. There are formulations that are designed to be applied in only two coatings using a brush, roller or spray gun. So rejuvenating old cabinetry, benchtops or any tiled surface is so easy and simple.

  1. Switch to modern hardware

Trade in your old-fashioned fitting and give doors and outdated cabinetry a contemporary new look. It is a small detail, so it is an instant makeover that is usually overlooked. 

You don’t necessarily have to go for high-end brands. Choose styles that fit your personal taste. You can choose a hand-turned sustainable wood handle or a leather variety with modern styling. It can be whatever complements your space and fits your style.

  1. Modernise your lighting

Use statement lighting or simply change bulbs to make your home functional and mood lighting. Your home can be transformed by achieving the perfect equilibrium and functionality. With lighting, it could be as simple as changing to globes to relax the mood at roughly 2000k, or invigorating your space using a whiter light and 4000k globes.

For instant elegance, install beautiful statement lighting to the mix.

Make sure they compliment your space for visual impact. Scale is essential, so factor in your light’s size with the objects surrounding it. Do this by selecting a light a third of the size of the object nearest to it. It creates the right balance.

  1. Bring in plants

Greenery doesn’t only hide unsightly corners, it can also transform your home into an elegant environment that promotes wellness and adds vitality.

Plants soothes the soul and are important to healthy living. In addition, plants are a simple and cost-effective styling tool.

Build a garden inside your home that features texture, colour and scale. Put plants or flowers in colourful pots that are easy to move around. Seek the help of an indoor garden expert with lots of experience. This allows you the freedom to style with ease. 

And if you’re selling, using potted plants is also inexpensive as you can take them with you to your new home!!

For more makeover tips even if you are not selling, contact Annette on 0418447856 for her advise on your home.

Things That Turn Off Buyers

There is no right way to sell a house, but there are wrong ways to do it.

All agents have their own way, and each buyer will react uniquely to their sales pitch. But those varied responses don’t give agents a free rein.

Though prospective buyers will all be different, they will be influenced by human nature. This means there is still some type of rulebook when it comes to selling a property.

Buyers will be turned off by dirt, bad odours or clutter. So you have to make an effort to help them visualize themselves living in your home.

Having said that, here are nine things that could possible turn off prospective buyers. Ignore them at your own risk.

  1. Clingy vendors

It cannot be easy letting go of a home where you have spent years making memories. But when you have decided to sell, you need to commit to see the process through.

Allow your agent to do their job, and provide prospective buyers the space they need to get attached. Sellers who hang around during an open home, or entertain prospective buyers with family stories, normally turns off buyers instead of attract them.

Even if you are quite entertaining, don’t forget that selling a home is a business deal. You have to remain as detached and neutral as possible, and let the buyer imagine themselves moving in and living in your home.

  1. Dirt

A property that is not well presented can often break a deal. Buyers will leave if they see dust, dirt and other mess. So get the services of a professional cleaner, a home stager, or both to put your property in order.

Clean the whole house from top to bottom, including those spaces that are not often seen, with special attention on the living areas, backyards, bathrooms and toilets. 

Moreover, do something about evidence of wear and tear. Small maintenance problems might not be a big deal, but buyers may see them as a sign of much bigger, underlying problems.

  1. Smells

There are different opinions about which smells help sell a home. However, most property experts say that the easiest way to a buyer’s heart is a reliable supply of fresh air. That is because buyers have different smell preferences and because there are those who assume sellers are trying to hide a bad smell when they use air freshener heavily.

So instead of trying to look for the right incense or candle, work on getting rid of bad smells instead. Open a lot of windows hours before the open inspection, and avoid cooking as well.

  1. Clutter

There is no reason for a house to be cluttered on open inspection, so you have to do more than a cursory cleaning before you put your home up for sale. Think strategically and systematically when de-cluttering. Begin in areas that will be used by the buyers the most. You may be able to excuse an untidy garage, but you will not find it easy to explain a messy living room.

If you are feeling overwhelmed, hiring a professional organiser is worth considering. A professional will view your mess in an objective manner, launch quick, decisive measures to eliminate your excess, and stow away the rest out of your sight.

  1. Temperature

It is what we call the Goldilocks effect: If a home is too warm or freezing, your buyers will not be happy.

It may not break the deal completely, but buyers will not be pleased if they don’t experience your home at its optimal comfort levels, and will ask pointed questions regarding the heating and cooling system. So, be ready with an air conditioner and heating when needed.

Preferably, you want the temperature at your home between 22 degrees and 26 degrees. Doing this may increase your monthly energy bill slightly, but the amount that you will pay to achieve the optimal temperature for your property will be nothing compared to the amount that you will receive from the purchase price.

  1. No price

Your listing is typically the first time potential buyers will look at your home, so it should contain as many important information as possible to catch their attention.

First, your listing should state the asking price. If they don’t see it, buyers will quickly dismiss your property, and jump to the next one that fulfils their requirements.

Buyers have budget in mind all the time. Pining down a specific dollar figure is not always possible, but not putting at least a price range in your listing will most likely turn off buyers, who may presume the home is beyond their budget (even if the truth is the opposite).

Keep your property in contention by allowing buyers to determine whether they can afford it or not.

  1. No photos

Are you willing to purchase a product without seeing it first?

Photos are the most effective way to encourage a prospective buyer to make an enquiry or take a look at a property. People either have to envision themselves living in your home, or they have to gain a realistic impression of how it will fare as an investment.

Ask your agent for help in creating a series of photos that will showcase your property in the best light. Failing to do this will narrow down your target market significantly.

  1. Personal photographs

Never forget that you are not the person purchasing your home.

The things you like may not be the same for buyers, so you must try to create an empty canvas for prospective buyers to let them envision living in your home. Remove provocative pieces of artwork, paint your home in neutral colours, and store any personal photographs. Moreover, hide any evidence of you and your family’s occupation of the property.

Your property should still look and feel homey, but all notes, documents or certificates that show your identity should be stored away, as they can hinder a buyer’s efforts to connect emotionally to your property.

  1. Your agent

Your agent can make or break a sale by being sloppy or underwhelming with the advertisement description of your home. Make sure to choose an agent who has experience in marketing properties across a wide range of platforms by asking questions and doing a little research.

Compare marketing campaigns of agents in your short list, and find one with a comprehensive knowledge of marketing. Focus your questions on their experience and how they will go about promoting and selling your home. View and study how they promote other listed properties and show up at their open inspections in order to observe how they engage with buyers.

Your chosen agent should be able to design and recommend a good marketing strategy to attract targeted buyers, and should possess the skills needed to turn a promising lead into a sure sale. 

Even the best negotiator is never going to be able to sell your home if they can’t market it and get the buyers to turn up!  

Key for women investors

Can women achieve financial freedom with property?

Women are experiencing poorer outcomes than men when it comes to their long-term financial futures, and it’s a well-known fact the the financial gender gap is a common denominator.

According to the Australian Human Rights Commission, increasing numbers of maturing women in Australia are experiencing or are at risk of being homelessness, with a rise of over 30 per cent in the last five years.

Three in five single mums (60 per cent) and around half of all single women (46 per cent) said they had no idea on who to ask for help and confessed to not knowing enough about money to getting their finances or their housing problems on track.

Women need to take control of their financial futures and it’s never too late to start.  Sure, it’s preferable when women are younger and single, but they can be instigated at any age – particularly to help prevent financial stress following a marriage or relationship breakdown.

Starting again

I personally had to start again.  A young mum with a two and a three year old, and at the end of my marriage, I walked away with just a small amount of equity in my house and a massive mortgage.

So, I got a serious. I had to make sure that I didn’t loose the roof over my children’s heads.  I spent pretty much every day and night working.  I was already good at budgeting but now it was tighter than ever, living pay packet to pay packet and having only 40 cents left each week.  Just enough to buy the kids a soft cone from McDonalds each week as a treat.

My background was accounting but I also sold cosmetics with a direct selling company in peoples homes and I modelled too.  Every catwalk and tv commercial job I could get I took and I would make it all fit, somehow!

I just worked and worked, paid down the house until I had on $27,000 to go, was able to build a brand new home and keep my existing home as an investment property.   Now many years later and after a few changes in careers I’ve ended up owning my own real estate business selling and managing properties.

For more information about how to find your financial independence through property, book an appointment with Scott Pfeiffer of  Pfeiffer Properties  or attend one of his information sessions.

https://www.pfeifferproperty.com.au/