3 Things That Improve Your Investment Property Returns (and 3 That Definitely Don’t)
Not all improvements are the same, especially when it comes to your rental return.
If you own an investment property, you’re always looking for ways to improve rental property returns. But not every dollar spent translates into a higher yield. Some investments pay off significantly, while others drain your budget without real financial benefit.
So, how do you know where to focus your efforts? Here are three things that genuinely increase your rental return, and three that might seem like a good idea but won’t help your bottom line.
3 Things That Actually Improve Your Returns
1. Strategic Upgrades That Add Tenant Appeal
Not all renovations are worth it, but small, high-impact upgrades can make your property more attractive to tenants and justify a rent increase.
Air-conditioning: With Australian summers getting hotter, tenants now expect cooling as a standard feature.
Built-in storage: Maximising storage space, particularly in smaller properties, adds value for tenants.
Security screens: Providing extra security and ventilation, these are particularly valued in family-friendly areas.
Updated kitchens: A modern, functional kitchen is a top priority for renters, but a full renovation isn’t always necessary. New benchtops or cabinet doors can make a big impact at a fraction of the cost.
According to PropTrack senior economist Anne Flaherty (in an article by realestate.com.au), “Properties listed for rent at the higher end are taking longer to lease out, with more renters looking to move into more affordable properties.” Keeping your property desirable with practical updates ensures you attract quality tenants quickly.
2. Proactive Property Management
A great property manager doesn’t just handle the basics. They actively protect and grow your investment.
Regular inspections prevent small issues from becoming expensive repairs.
Prompt maintenance keeps tenants happy and reduces vacancy risk.
Good communication with tenants fosters long-term relationships, reducing turnover.
Think of a property manager as a partner in your investment success. A well-managed property holds its value, and tenants are more likely to renew their lease.
3. Reviewing the Rent Regularly
Many landlords fail to review their rent annually, leading to lost income. Market conditions change, and failing to adjust could mean you’re undervaluing your property by $20–$30 a week, which adds up to over $1,500 per year!
Keep yourself up-to-date with rental trends in your area.
Use data-driven pricing to remain competitive while retaining tenants.
Implement small, regular increases rather than a large jump that might drive tenants away.
3 Things That Don’t Help Your Returns (Even If They Seem Like a Good Idea)
1. Overcapitalising on Renovations
It’s tempting to go all out on upgrades, but not all renovations lead to higher rent.
A $30,000 bathroom renovation won’t necessarily increase rental income enough to justify the cost.
High-end finishes and luxury upgrades can be nice, but tenants typically prioritise functionality over premium materials.
Instead of overhauling everything, focus on cost-effective improvements that improve appeal without excessive spend.
2. DIY Property Management
Managing your own property might seem like a great way to save money, but it often leads to missed rental increases, poor tenant selection, and costly compliance mistakes.
Landlords often struggle with legal compliance, leading to potential fines.
A bad tenant can cost thousands in unpaid rent and damage.
Without market insights, many DIY landlords undercharge rent, missing out on returns.
A professional property manager ensures you stay compliant, secure the best tenants, and optimise your rental income.
3. Leaving the Property Empty Between Tenants
Every week your property is vacant means money lost. Some landlords wait too long to list their property, set the rent too high, or don’t market it effectively.
Start marketing before the current lease ends to minimise downtime.
Be realistic with pricing based on local demand.
Work with your property manager to ensure a quick turnover between tenants.
Even if your property is negatively geared, vacancy gaps can create serious cash flow issues that even tax benefits won’t cover.
Optimise Your Returns Now
Smart property investors spend money where it counts and avoid the traps that don’t contribute to better returns. A well-maintained, competitively priced, and professionally managed property will always outperform one with unnecessary luxury upgrades or DIY management mistakes.
Need an expert opinion on how to get the most out of your rental property? Contact us today for a free consultation! We'll work with you to pinpoint both immediate improvements and sustainable strategies to increase your returns.