As with any investment, whether a rental property or shares, it’s essential to assess the earning potential or the return on investment (ROI) the investment can deliver and how you can further improve rental returns regardless of market conditions.

There are two sources your investment property return comes from – rental yield and capital growth. Understanding rental yield is a great starting point in taking control of your investment. Rental yield measures the profit you generate from your asset. It also helps you determine a property’s value and potential.

‍Part of this equation involved weighing how much rental income your property generates weekly, monthly, or annually? Higher rental yield equates to greater cash flow – and more substantial capital gain if you decide to sell up down the track.

‍To figure out the rental yield of your property, measure the variance between your annual rent less the overall costs such as council rates, maintenance, repairs, body corporate and other expenses. ‍When you know the rental yield of a property, you’ll be better able to understand your profit margins, the kind of cash you’re working with, and how much you have available to make improvements.

Typically, enhancements don’t need to cost an arm and leg. It might be as simple as giving the kitchen a facelift with new cupboards and fittings. Alternatively, adding some ceiling fans might cost a few hundred dollars but add to the appeal of your property, especially in summer. If the budget extends, perhaps an air conditioner or new flooring might help you improve your investment yields, whether the rental market is strong or a bit softer. Maybe a bathroom refresh or adding storage could also improve the tenant appeal of your investment and, in turn, its rental yield.

Regularly reviewing the rent is also vital in acquiring a long-term understanding of your property investment strategy.

‍Keeping in touch with your Raine & Horne Property Manager will help you understand the implications of changing prices or even higher council charges on your rental yield. Charging rent in line with the market value will help you stay on top of any changes, and you will be able to assess if you need to adjust your rent price.

Your Raine & Horne Property Manager can answer all your questions about how to improve your rental yield.