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3 Ways to Maximise Your Rental Yield

When investing in an apartment it is important to focus on two major areas; capital gains and rental yield. This article is going to focus on the latter.

Rental yield can be broken up into gross rental yield; the amount of rent that is coming in and net rental yield; the money that is left after expenses are paid. To maximise your net rental yield it is not as simple as increasing the rental price. It is imperative to keep your rental price competitive with other similar properties in the market to maintain a constant tenancy. Your property manager should be able to provide guidance on a suitable rental price that is competitive yet not too low.

Three great ways to put more money in your pocket while maintaining a competitive price are:

1. Investigate what building you are buying in

Buying an apartment in the right building is imperative to achieving a good rental yield. Find an apartment tower with a proven track record of low vacancy rates and good rental yields. A quality building will also attract quality tenants who take care of your apartment in turn saving you money on maintenance costs.

2. Investigate the owners corporation managing the building

A good owners corporation will ensure you do not have unexpected large building maintenance payments. Your body corporate fees should cover the majority of the upkeep of the building’s common areas. Good owners corporation companies will have a healthy maintenance fund and be able to manage maintenance and capital works without asking for significant extra owners corporation fees by way of special levies, keeping your costs down and net rental yield up.

3. Furnish your apartment

A fully furnished one-bedroom apartment generates approximately $3000 more per annum compared to an unfurnished apartment. An investment in furniture for your rental property can also be depreciated to offset against your rental income, lowering your overall tax liability and the total expenses for your property.