How to get more rent for your property in Richmond, Victoria
As a rental property owner, it pays to know what tenants in your area want. Even small additions to your property can get you a much better rental return - and keep good tenants around for a lot longer.
If you own a rental property in Richmond what can you do to get the most from it?
Richmond is one of Melbourne’s most in demand suburbs and it's not hard to see why. Located just 3km from the CBD it has excellent transport links, is choc full of food, nightlife and entertainment venues and it's even home to the MCG. That popularity feeds into the huge rental demand, with new listings attracting hundreds of applicants.
Richmond has a vacancy rate of just 1.2%. Anything below 3% means the balance is tipped in favour of landlords, so clearly there’s high demand and it may seem as if landlords don’t have any work to do.
But understanding a suburb like Richmond more intimately allows you to anticipate needs and make changes to your property that give you an edge and in turn increase your rental yield.
So, let’s take a look at Richmond – who’s living there, what do they want, and what can you do to make your rental property more attractive to the best tenants.
I’ve also included a bonus suburb report for Richmond you can download at the end of this blog.
Who’s living in Richmond?
Richmond is mostly populated by young renters, with 54% of homes being rentals. The median age is 33.4, younger than compared to the national median of 37.4, and the majority work in professional occupations.
Richmond residents are also high income earners, with median income at $56,000 in 2013 and nearly half the suburb’s residents earning over $78,000.
Here’s a snapshot of what average rents look like in Richmond:
In many suburbs units don’t get the dollars that houses do but in Richmond the gap is much smaller.
The more you look at the stats and the more time you spend in Richmond, it's blindingly obvious that this is a place where young professionals live and hang out.
The trend seems to show that when it's time to settle down and have a family Richmond residents then relocate to surrounding suburbs like Kew and Hawthorn.
Why do tenants want to live in Richmond?
In one word: location. Richmond is close to the inner city, which means a short commute to work. Richmond station is a hub for the eastern suburbs, along with a plethora of trams and buses as well. Proximity to the M1, supermarkets, restaurants (and don't forget IKEA!) is a big plus.
A lot of Richmond’s appeal comes from its visuals too. With a mix of old terrace homes, warehouses and modern offices. This eclectic mix give it a young vibrancy.
What are tenants looking for in Richmond?
With so many young professionals renting in Richmond, many are looking for smaller units with modern interiors. Of the 202 properties listed for rent in July 2017, 138 were units – only 64 were houses.
Most units were one bedroom (56), followed by two bedrooms (106), and three bedrooms (37). If you go further out of the city, you’ll tend see more three or four bedroom properties advertised, so you can see how Richmond attracts a certain crowd.
When looking to rent out a property in Richmond, it’s important to note that many are looking for specific aesthetics or features and without them, your property simply isn’t going to stand out or get you that little bit of extra.
Even though many of Richmond’s properties are older – terrace homes in particular can be 100 years old in some cases – nearly all of them have modern interiors. In fact, the vast majority of properties listed on realestate.com.au or Domain have at least upgraded kitchens and bathrooms, with modern features and fixings.
That also includes floorboards and lots of natural light. The aesthetic style adopted by most of these units is a modern, minimalist feel – which fits in well with Richmond’s youthful vibe.
It’s really important to stress this point. Richmond homes are modern and upgraded, even if the exterior is extremely old. Without that refurbishment of at least a bathroom and kitchen, you’re going to be behind the rest of the pack – doing up the entire interior is highly recommended.
Open living spaces
Given people in Richmond are generally in a shared home as either young professionals or families (see below) many properties feature large, open plan areas for socialising.
Source: RP Data
Lots of storage
Richmond properties are built closer together, which means they don’t necessarily have a lot of space. One feature that helps properties stand out in Richmond is lots of storage for prospective tenants.
Saving your tenants a few additional minutes’ walk to the train or the main shopping strip of Swan St can be a small luxury with a big pay off. Properties closer to transport and amenity options will enjoy higher demand than those buried deeper in the residential area.
Although proximity to the train / trams is important, the majority of residents still own a car so a car space is the next best thing. Richmond has 31,000 people and 27,000 passenger vehicles, so that’s nearly one per person - and parking is a b*tch. If you don’t have a garage, carport or parking permit find out the best places to park and make it obvious to tenants.
What is going to help your property stand out in Richmond?
Some other things that can help your Richmond property earn a little extra rental yield:
Like many other suburbs, many Richmond properties don’t allow pets. Doing so could enable you to ask for more.
In a suburb of young professionals, it can pay to be flexible. Offering the possibility of six month leases can help in that regard, especially given that Richmond has such high demand. You might want to consider long term lease as well!
When renting out units, modern apartment blocks in Richmond have access to amenities such as swimming pools and gyms. If purchasing an apartment in one of these buildings, you’ll need to consider whether your tenants will have those or not.
A great view of the nearby city skyline won’t necessarily get you any extra rent…but it definitely won’t hurt your chances, either.
Don’t try to make your property “cool” or funk it up. Just let your tenants do that with their own touch - you want to appeal to everyone with a minimalist approach and let them decorate on their own.
Of course, this is all above and beyond the normal amenities tenants expect such as modern appliances, heating and cooling options, and extra security like alarm systems - especially in an urbanised suburb like Richmond.
How can you reduce your expenses to earn more?
You can only ask so much for your rental property before people stop applying and look for a better deal but that doesn't mean there aren't other ways of increasing your rental yield.
One of those ways is by reducing your expenses. Many of you are no doubt very much aware that one of the biggest expenses for rental property owners is real estate agent fees!
In Richmond you're looking at handing over around 7% or more of your rental yield not to mention the leasing fee (1-2 weeks rent) and other ancillary costs.
This is where Cubbi can be a useful tool in maximising your return.
Cubbi is an easy to use property management platform which you can use to reduce your costs by doing everything online and cutting out the agent. Instead of using a property manager, which can be slow and expensive, all your processes are done online – everything from having a lease drawn up to collecting the rent. When it comes to finding tenants all of our listings on realestate.com.au are upgraded to highlight listings for the first 30 days (4x larger than standard and sit higher up the search page) to help you find tenants faster and cut down your vacancy time.