How To Increase Your Rental Income

We know from over 40 years of experience that real estate isn’t just an investment to “set and forget.”

Landlords who are serious about boosting their rental income need to proactively assess and optimise the value of their property, so that tenants are prepared to pay more.

So, what are some of the best ways to increase rental income if you are a landlord in Auckland?

 

What Is a Reasonable Rent Increase In NZ?

A “reasonable” rent increase is any amount that takes the property up to evidence-based “market rent”.

It’s important, however, to comply with tenancy laws in NZ around rent increases:

• Rent can only be increased once every 12 months.
• Increases can occur 12 months after the tenancy starts, and not within 12 months of the last increase.
• Landlords must give tenants at least 60 days’ written notice.
• Landlords can determine the amount of increase but must follow proper procedures.
• Tenants can contest rent increases if they believe they’re excessive, and landlords must consider any agreements or improvements benefiting tenants.

If you are unsure what would be acceptable market rent, we urge you to research the market thoroughly.

Use authority sites like Tenancy Services to check the weekly rent for properties in your area:

Source: Tenancy Services

Our experts in rental property management in Auckland help landlords to set an acceptable market rent, so that they can sustainably increase rental income.

 

6 Strategies to Boost Your Rental Income

These are the best, justifiable ways to boost rental income in NZ:

1. Upgrade The Appliances

It’s well worth checking the age and condition of frequently used appliances in your property, such as washing machine, oven, stovetop, dishwasher, and microwave.

If they are old and at high risk of failing, prioritise replacing them with more modern and user-friendly models.

Not only could this help increase rental income, but as newer appliances will be less likely to break down, you will be less likely to have to pay to replace them at short notice.

2. Consider Allowing Tenants to Keep Pets

As of June 2024, the new government plans to make it easier for tenants to keep pets while introducing pet bonds to increase landlords’ rental income.

How we advise you approach this as landlords:

• Consider implementing a pet bond of up to two weeks’ rent to protect you from potential pet-related damages beyond “fair wear and tear.”
• Require tenants to obtain consent before bringing pets into the property.
• Recognise the demand for pet-friendly rental properties so you can attract a broader pool of renters and potentially increase your rental income

This helps to make a “pet-friendly” approach one of the easiest ways to increase rental income, given the relative lack of rental properties on the market that allow pets.

3. Invest In Storage Solutions

Replacing or introducing cupboards and drawers in areas such as the kitchen and the bedroom can boost a property’s visual appeal and practicality.

4. Add Another Bedroom

There might be an additional living space in your property that you could split to create an extra bedroom. This can make a property more attractive for tenants seeking additional bedrooms, thereby increasing the rental value.

However, you should ensure that any “new” bedroom you create has enough space for a double bed and wardrobe.

5. Provide Parking

Depending on the location, this might not always be feasible. However, putting down gravel or concrete to create a parking space can increase a property’s appeal for tenants who depend on their vehicles.

6. Furnish The Property

A fully furnished apartment is usually worth more than a partly furnished or unfurnished property.

This is because some shorter-term tenants are happy to pay a little extra in rent to have the essential furniture and curtains in their rented home, in the knowledge that they may not be staying there in the long term and might wish to buy such furnishings for themselves.

 

The Impact of Expert Property Management

There are many benefits of property managers that can help to increase rental income. A reputable property manager can oversee a wide range of aspects of managing your property.

For example, at Harper Properties, we support with:

• Vetting potential tenants, managing the tenant relationship once someone has begun to rent the property, and arranging essential maintenance and repairs.
• Handling important yet tedious aspects of property management, such as organising maintenance and repairs and ensuring the aesthetic appeal of the property
• Provide insights into local laws and market dynamics, ensuring compliance with regulations and optimising rental strategies tailored to the current demand, whether it’s for students, families, or working professionals.
• Facilitating communication with tenants, including discussing rent changes professionally and tactfully, relieving landlords from potentially uncomfortable conversations and ensuring smooth tenant relations

These steps will help maintain the value of your property, and ensuring that the best tenants stay long-term. This, in turn, will help you maintain a healthy and consistent rental income over time.

 

Success Story: How We Help Increase Rental Income

We recently managed to refurbish an old, rundown home in Manurewa for an overseas client.

Within the budget set by the property owner, we made minor improvements to modernise the kitchen, including:

• Painting the fronts of cupboards.
• Installing a new oven, rangehood, and dishwasher.

We also upgraded other areas of the property, such as:

• Painting the walls.
• Installing a new shower in the ensuite.
• Converting the old bath in the separate full bathroom into a shower-over-bath.
• Installing a glass screen to add an extra shower.

We completed all necessary work to satisfy the NZ Government’s healthy homes standards.

We ultimately re-listed the property for $150 per week more than the owner had previously been able to achieve.

This example is typical of the kind of work we do all the time as a firm specialising in property management in Central Auckland, West Auckland, East Auckland, and other areas. It shows that just a few minor improvements can make a big difference to a tenant’s perception of a property’s value.

 

Let’s Discuss Your Property’s Rent Potential

We can also discuss how we can help manage your real estate investment in Auckland, so that you can enjoy higher returns and long-term financial success.

Give us a call on 09 361 2810 or email us at auckland@harperproperties.co.nz.