Maximising Rental Property Income: 7 Expert Tips for Investors

Setting the right rent is crucial. Overpricing can lead to extended vacancy periods, while under-pricing results in missed income opportunities. To determine the optimal rent, property managers review comparable properties, local market trends and tenant demand. A good property manager will adjust rent periodically to align with market conditions, ensuring your property remains attractive while maximising your income. 

Tip: Regular rent reviews, ideally every 12 months, help investors stay in line with market rates without surprising tenants with sudden increases. Communicating rent adjustments clearly and in advance maintains positive relationships with tenants. Your property management team should look after all of this for you.

A vacant property generates no income and can quickly erode returns. Long-term tenant retention is key to reducing vacancy rates and minimising turnover costs. A happy tenant is a long-term tenant. Providing excellent customer service and maintaining the property in good condition encourages tenants to renew their leases. This includes addressing reasonable repair and maintenance requests promptly. Offering early lease renewals can also reduce the risk of tenants moving out.  

Tip: Consider incentives such as minor rent reductions for early renewals or loyalty rewards like small upgrades, which make tenants feel valued and more likely to stay. 

To boost both short-term cash flow and long-term capital gain, caring for the property as though it’s your own home is critical. For example, strategic upgrades significantly enhance the appeal of a property and justify higher rents, and simple improvements like repainting, modernising fixtures or installing energy-efficient appliances can attract premium tenants who are willing to pay more. Features such as air conditioning, updated kitchens or outdoor spaces with landscaped gardens also boost the property’s rental value and reduce vacancy periods.

Tip: In Australia, immediate tax deductions are generally allowed for repairs and maintenance that restore an asset to its original condition. However, renovations or upgrades are classified as capital improvements and typically cannot be claimed as immediate deductions. Instead, these costs are added to the property’s capital base and depreciated over time through capital works deductions. It’s always best to check with your accountant before undertaking any work.

Short-term or furnished rentals can cater to specific tenant demographics, such as travelling professionals, international students or temporary workers. These options typically yield higher rents but may require more intensive management. In high-demand areas, platforms like Airbnb can offer additional income potential during peak periods. 

Tip: Ensure you understand local regulations for short-term rentals, as they may require additional permissions or compliance with specific laws. 

Offering pet-friendly rentals can broaden your pool of applicants and justify a higher rent. In NSW, recent reforms aim to make it easier for tenants to keep pets in rental properties. In fact, landlords can no longer refuse pet requests without valid reasons. If a tenant applies to have a pet, the landlord must respond within 21 days, providing a justified reason if the request is denied, such as property suitability or legal constraints. 

Tip: A pet-friendly policy can include reasonable conditions, such as requiring professional cleaning or pet bonds. This approach protects the property while expanding your potential tenant pool. 

An experienced and efficient property management team can be the difference between maximising returns and dealing with frequent challenges. Property managers not only set appropriate rent levels but also oversee tenant relationships, ensure legal compliance and manage repairs efficiently. Their expertise helps reduce vacancies, maintain tenant satisfaction and prevent costly disputes. 

Tip: Choose a property manager with deep knowledge of the local market to ensure your property attracts reliable tenants and stays competitive. 

Lease flexibility can attract a broader range of tenants and reduce vacancy periods. For example, offering 6- or 12-month lease options provides flexibility for tenants and caters to different needs. Additionally, including break clauses or offering rent-free periods can encourage tenants to sign leases quickly during slow rental periods.  

Tip: Review market conditions before setting lease terms. Shorter leases may provide flexibility in a rising market, while longer leases ensure stability in slower markets.