Buying a property can be one of the most rewarding investment decision. Over time it will provide you with capital growth, but in the interim, you are lucky to also generate a rental income. A good investor is always seeking new ways of maximising their rental return. An important strategy in achieving this goal is obtaining a rental appraisal.
What is a rental appraisal?
Unlike a organising a property valuation, a rental appraisal is a free service provided by your local Property Manager. It is their professional opinion (not a guarantee), indicating what amount of rent you would receive in the current market. A Property Manager is constantly renting various properties and re-letting them. They are the most reliable source as they have first hand information regarding the general asking rental prices.
When receiving a rental appraisal many Property Managers provide evidence to support their opinion. They may present a summary of similar properties that were leased within a the last 6 months. It is a valuable document that will include other useful information, such as current market trends, vacancy rates and outline the type of tenant demand for your investment property.
There are many reasons to get a rental appraisal
It doesn’t cost anything
As it cost nothing to obtain, it’s a risk-free option. A savvy investor should certainly take advantage of the data.
A Property Manager will collect and share information that can directly help your decision making. This will help influence your goals now and into the future. This truly makes getting a rental appraisal an opportunity too good to miss out on.
Set the standards and goals
We may have purchased a fantastic investment property, but a savvy investor needs to make good decisions with less emotional attachment. Having a rental appraisal will help set your standards early, while also helping set your goals going forward. Basing decisions on more factual information will enable you to position your future cash flow and understand what capacity you have to maximise your rent.
Having more knowledge will enable a better decision
A benefit of getting a rental appraisal will have you capture a better understanding of your asset. This knowledge is necessary if you are looking at holding it long term. An good investor should know their property and know their target market.
A Property Manager can assist you further by helping you understand the estimated outgoings of the property (such as rates, insurance etc), and help you find out what can be improved upon. By implementing some recommendations by a Property Manager will improve your ability to source a quality tenant that is willing to pay a high rental price to occupy it.
Property Manager’s can also help you understand what rental returns are being achieved in surround suburbs of your investment property. You can use this information to see how your property is performing in comparison to other locations.
If you are looking to expand your investment property portfolio, a rental appraisals can also be useful by gaining insight into potential returns.
A new property investor
Rental appraisals aren’t just for the savvy investor. Obtaining a rental appraisal is a time efficient way of understanding what your return on investment will be. This will help you ascertain what location is best suited to your budget.
The rental appraisal can also help you manager your cash flow and understand your borrowing capacity.
Creating new contacts
Requesting a rental appraisal can also present a new introduction to a professional. Having a good contact in the real estate industry will help position your property portfolio to meet the best opportunities available.
A good Property Manager will reduce your administration burden and help you achieve your goals by maximising your rental return.
Click the link top learn other great tips to increasing your rental return.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
July 2018
