How to Pick Up Extra $5000 in Rental Property Yield: The Importance of Setting the Right Rent!
- Posted By Frank Pang
How to Pick Up Extra $5000 in Rental Property Yield: The Importance of Setting the Right Rent!
As a landlord, you always want to maximize your rental property yield. One crucial factor that contributes to your yield is setting the right rent. In this blog, we'll discuss how setting the right rent can help you earn an extra $5000 in rental property yield and how to achieve this goal.
- Avoid Higher Rent and Longer Days on Market:
Renting your property at a higher price may seem like an attractive option, but it often leads to longer days on the market. On average, a property with a higher rent can take 2-4 weeks longer to rent out. If the average rent is $450 per week, this delay can cost you around $1000 in lost rental income per year.
- Attract Multiple Applications with the Right Rent:
Setting the right rent can result in multiple applications for your property. This allows you to select the best tenant, rather than being forced to choose from a single applicant when advertising at a higher rent. In cases where you have only one application, you may have to negotiate the rent again with the tenant, potentially resulting in a lower rent than initially desired.
For example, if a tenant offers $50 per week less than the asking price and you end up accepting $25 per week less, that's a $1000 difference in yearly rental income.
- Longer Tenancy with the Right Tenants and Savings on Agent Fees, Advertising Fees, and Vacancy Costs:
The right tenants are more likely to stay for an extended period. By setting the right rent and attracting multiple applications, you increase the chances of finding a suitable tenant who is comfortable signing a two-year lease. This not only benefits your rental income but also saves you agent fees, advertising fees, and vacancy costs. These costs can easily add up to another $2000 - $3000 that can be avoided by setting the right rent.
Setting the right rent for your rental property is crucial for maximizing your rental yield. By avoiding higher rents that lead to longer days on the market, attracting multiple applications, and securing longer tenancies with the right tenants while saving on agent fees, advertising fees, and vacancy costs, you can potentially earn an extra $5000 per year. Always research the local rental market and consider your property's unique features and amenities to determine the optimal rental price.
Frank Pang
0433 388 898
"Welcome to our real estate blog! I'm Frank, Director of BOLD, with 15+ years in Melbourne's property market. Here, we share insights, tips, and market updates to help you make informed real estate decisions. Catering to investors and first-time homebuyers alike, we're excited to have you join us. Reach out with any questions, and let's navigate the property world together!"
