When letting your investment property its important to secure a lease that will not only maximise the return but also underpin the security of your investment. There are essentially three elements of making a good lease
Always number one on any list is quality. Everything will fall into place once the quality of something is established, in this case the tenant. To ensure a good tenant is found and selected, its critical for your property manager to thoroughly check references and history before passing on the final selection duties to yourself.
Selecting a lease period that supports your property goals for the near future is also very important. I would consider a lease of 12 months or more as a priority to secure your investment for a longer period of time.
Longer term tenants will reduce vacancy, reduce changeover costs like the letting fee, advertising costs and the loss of rent that can occur between the end date of the old tenant and the start date of the new one. If you’re concerned about achieving market-value rent at all times, get your property manager to work 6 monthly rental increases into the tenancy agreement.
In theory, everybody wants maximum dollar for the asset. This is achievable in markets with very low vacancy rates where there is active competition for the property between prospective tenants. Rent flexibility is common in markets where demand for rental properties is lower but the key to maximizing the yield lies in ensuring regular rent reviews with minimum escalation causes. Offering the property in an attractive fashion is also important to ensuring top dollar for rent
Considering each of the above three elements before the letting process begins should ensure a positive outcome for your investment property and arm you with a trouble free tenancy.