The sun is out, beanies are gone and it’s time to show off that pale skin. Like many typical Aussies, Spring is our favourite time of year. But it’s not just because it’s time to dig out from the burrow we all hide in during winter – more so, Spring is the beginning of the so-called ‘peak season’ in Sydney’s real estate market.
This is typically when we see the most activity in the sales market – more auctions, more buyers, more sellers.
In 2024, Sydneysiders get to throw off their blankets and enjoy a thriving local property market, with property prices having reached a new peak in July, growing 5.6% annually. Whilst in the rental property world, vacancy rates remain at record lows, keeping the ball very much in the landlord’s court.
So, why should the start of the new season impact you as a landlord? In short, this is the ideal time to complete an investment property health check. This is an exercise we constantly go through with our landlord clients to ensure that they are completely maximising their earning potential on their investment property.
The health check involves a series of questions concerning your property’s condition, lease structure, earnings and tax considerations, along with an array of other considerations.
Complete our property health check
Here are some of the questions we typically ask when we perform an investment property health check:
1. How long is your current lease period?
Your lease period is more important than you think. This is not only an obligation for creating a rental agreement with True, but we look at it as a strategy to consistently question the earning potential of your property. Then again, longer-term leases typically attract better quality tenants.
2. How does your rent compare to other properties in the area?
It is important to look at other properties that have recently been leased in your local area, to see how the market has moved since your tenants moved in your property. Looking at similar properties in the same area, is your rent at an appropriate price?
3. Are your tenants paying for water usage?
It is a common misconception that all tenants must pay for water services when leasing a property. This can be part of the negotiations when a new tenant moves into your property and you can make it a requirement with your property manager when they are accepting applications for new tenants. Charging your tenants water usage is a way to improve your net earnings on your property portfolio, without charging higher rent.
Keep in mind, there are significant changes coming to water efficiency standards, which you can read about in our recent article regarding toilet compliance. We recommend reaching out to your property manager to see if this is a strategy you can explore for your property.
4. Are you appropriately insured?
There are many reasons why you need insurance. And there are many types of insurance that landlords can access. But how do you know which ones are right for you and what type of cover you need? Your property manager will be able to have this conversation with you and recommend the appropriate insurance coverage for your individual circumstances.
5. How long ago was your last rent increase?
It’s important not to treat your investment property as a ‘set and forget’ investment. The market is constantly changing and so too should your investment strategy. Speak with your property manager about your current rental price and see if it needs to be increased.
6. Have you completed a tax depreciation schedule?
A tax depreciation schedule evaluates the depreciation of your investment property from general wear and tear over time. This is an exercise which empowers property investors to claim this depreciation through the ATO at tax time.
This can be a great way to improve your bottom line for your investment property and we recommend organising a tax depreciation schedule to all our landlord clients.
7. Do you know the current market value of the property?
When was the last time you had your investment property valued? Speak with our sales team to see how the local property market is doing. Our team will be able to advise you if now is the right time to consider selling and moving on to your next property, or possibly expanding your existing property portfolio.
Contact Michael or Nicholas from our sales team to have a chat about your property valuation.
Speak with our experts
If any of the above questions provoked or inspired you to get on top of your investment property portfolio, then it’s time to have a chat with our team of experts. Get in touch with your property manager today.