If you have a reliable tenant, it may be worth charging less than the going rate to secure long term occupancy – Sarah Dawson

Investing in a residential property is an opportunity to secure regular income and an appreciating tangible asset. These five easy steps will increase your returns both now and into the future.

Maximum occupancy is the key to consistent income. Changing tenants costs time, money and effort. Every time a tenant changes, there will be a gap where you receive no rent as well as expenses for cleaning, repairs and maintenance.

Aim to keep your tenants for as long as possible. This means being a cooperative landlord – treat your tenants right and charge realistic rent rates, and they will reward you with consistent and timely payments.

Screen Your Tenants

Screening tenants is crucial in order to avoid unpleasant pitfalls. A bad tenant may not pay on time (or at all) and could cause serious damage to the property. This is rare but if it does happen it is a nightmare and the legal proceedings are long, stressful and costly. Always check references and financial status before accepting a tenant.

It’s important to charge rent that reflects some degree of value to your tenant. That way, your tenant has an incentive to stay over the long term, which as discussed above is the ideal scenario for maximum returns. This means knowing what the market rate is for a property like yours. Look at the rates for similar properties and price accordingly.

Five Steps To Successful Residential Investment

If you have a reliable tenant, it may be worth charging less than the going rate to secure long term occupancy. If the market dips, consider lowering the rent if it means keeping a tenant you would otherwise lose.

This should be obvious but can be tricky to navigate as a first time investor. If you are buying a residential investment property with a mortgage, it is crucial to know before you buy exactly what your monthly mortgage repayments will be and how they stack up against your anticipated income.

Know if your repayments are fixed or at floating rates and understand how much leeway you have if interest rates rise.