Most advice about improving rental return starts and ends with charging more rent. It is the obvious lever, and it is usually the least effective one available.
Your return is what remains after vacancy, turnover costs, maintenance, arrears and management have taken their share of a year's rent. A landlord achieving $640 a week for fifty-two weeks with a tenant who stays three years is comfortably ahead of one achieving $670 with six weeks empty and a new tenant every twelve months — even though the second number looks better in a listing.
Here are the levers that actually move the annual figure for a Perth investment property, roughly in order of how much difference they make.
Every week your property sits empty costs about 1.9% of your annual rental income. Three weeks of vacancy is close to 6% of the year gone, which is more than most rent increases deliver and more than a typical year of management fees.
Vacancy is rarely bad luck. It is usually the result of one of four things: pricing above the evidence, poor presentation, a slow or thin marketing effort, or leaving the re-letting campaign until the tenant has already moved out.
The fourth is the easiest to fix and the most commonly missed. If you know a lease ends in six weeks and the tenant is not renewing, the property should be advertised then — not on the day the keys come back. A well-run handover can put a new tenant in within days of the old one leaving.
Worked example: a property at $650 per week. Listing at $700 to chase an extra $2,600 a year, but taking four extra weeks to lease, costs $2,800 in lost rent. You finish the year behind, having also paid for a longer marketing campaign and more home opens. Our guide to rental appraisals in Perth covers how to price against real leased evidence.
Tenant turnover is expensive in ways that never appear as a single line item. A changeover typically involves a vacancy period, a full clean, garden tidy-up, minor make-good works, re-letting costs, a new condition report and the general risk that comes with an unknown occupant.
Against that, consider what a good long-term tenant is worth. They pay on time, report maintenance early instead of letting it worsen, treat the property as their home, and cost you nothing in re-letting for years at a stretch.
Retention is mostly unglamorous:
Improvement money is worth targeting carefully, because the suburb sets a practical ceiling on weekly rent regardless of how good the finishes are.
Before committing to anything substantial, ask for an appraisal both with and without the proposed work. If the difference is $10 a week on a $15,000 spend, the decision makes itself.
Rent that is never reviewed drifts below market, and the gap compounds. A property $30 a week under market for four years has quietly given away more than $6,000.
In Western Australia rent can be increased only once in any 12-month period, and the increase requires the prescribed written notice given well ahead of the date it takes effect. That makes the annual review a practical necessity rather than an optional exercise — miss the window and you wait another year.
Review annually, price against evidence, and then make a commercial judgement about the tenant in front of you. Not every review should produce an increase, but every year should produce a review.
Most of the damage to rental returns comes from things going wrong rather than from rent being too low.
Return is an after-tax outcome, and a number of ordinary costs are deductible — management fees, council and water rates, insurance, repairs, and in many cases depreciation on the building and its fittings. Older properties are often assumed to have nothing left to claim, which is not always true.
We are property managers, not accountants, and nothing here is tax advice. A quantity surveyor's depreciation schedule and a conversation with your accountant are the right way to work out what applies to your property.
It is easy to treat the management fee as a straightforward deduction from return. In practice the fee is small relative to the things management influences: how long the property sits empty, who ends up living in it, whether rent arrives on time, whether maintenance is caught early, and whether rent reviews happen on schedule.
An agency that saves three weeks of vacancy and catches a leak early has usually paid for itself for the year. One that charges less but leaves a property empty for six weeks has not. Our breakdown of property management costs in Perth sets out what the fees actually cover.
If you want a clear view of where your property currently sits, start with an accurate appraisal and an honest assessment of anything holding it back. A Wiser Choice provides free, obligation-free rental appraisals across Perth's northern suburbs, with the comparable evidence behind the figure.
You can request a rental appraisal, read about our property management services, or check the suburbs we cover.
Thinking about your investment? Get an obligation-free rental appraisal from a local property manager.
Call: 0415 730 804
Email: awiserchoicepm@outlook.com
Enquire NowGross yield is the annual rent divided by the property value, expressed as a percentage, but it is a blunt measure because it ignores every cost you actually pay. Net yield — rent received after vacancy, management, rates, insurance, strata and maintenance — is the figure that reflects what the property does for you. Two properties with identical gross yields can perform very differently once vacancy and repair history are taken into account.
Review it every year; increase it when the evidence supports it. In Western Australia rent can be increased only once in any 12-month period and requires the prescribed written notice given well in advance, so a yearly review keeps you inside those rules. Whether to apply an increase is a separate judgement — a modest rise that keeps a reliable long-term tenant usually beats a larger one that triggers a vacancy.
Often, indirectly. Allowing pets widens your applicant pool, which tends to reduce vacancy and can improve tenant quality because good tenants with pets have fewer options and tend to stay longer. Under current WA law tenants can request a pet and refusal is only available on limited grounds, and a pet bond can be required, so the practical question is usually how to manage it well rather than whether to allow it.
It depends entirely on the gap between what you spend and what the local tenant pool will pay. Cleaning, gardens, paint, flooring and functional fixtures usually return more per dollar than a full kitchen or bathroom replacement, because the suburb sets a practical ceiling on weekly rent. Ask for an appraisal with and without the proposed work before committing to anything substantial.
They are a cost, but cost and net outcome are not the same thing. Management fees are generally tax deductible, and the areas a good manager influences — vacancy length, tenant quality, arrears, early detection of maintenance and correctly timed rent reviews — typically move your annual position by more than the fee itself. Judge an agency on what it protects, not only on what it charges.
