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The McGrath guide to maximising your investment property’s potential

Creating investment goals that work

Every successful investment decision starts with clear, achievable goals.

Whether you’re buying your first investment, adding to your portfolio or reviewing an established strategy, it helps to be explicit about what you’re aiming for, how you plan to achieve it and how you’ll measure progress over time.

Your goals will naturally differ from every other investor’s, but the triedand-tested SMART framework provides a simple way to map and track any objective.

To put this into context, SMART stands for:

pecific

easurable

chievable

ealistic

imely

Using SMART to shape your strategy

Step 1 Step 2

Let’s assume you’re a first-time investor and your big-picture goal is to generate enough income from your investment to renovate your home. This objective is a useful starting point, but it’s still broad. It doesn’t specify how much you need or when you’ll need it.

The SMART framework helps you refine that goal into a clear, actionable plan.

Specific: I want to be able to access an additional $150k from my lender in 24 months’ time so I can renovate my home.

Measurable: I want my investment property to generate a 3–4% (or higher) rate of return so I can pay down my investment loan each month and increase my equity.

Achievable: The area where I purchased my property is averaging a 3–4% rental yield, so this is an achievable target.

Realistic: I want to maximise my returns and ensure I’m claiming the tax benefits available to me, so I will partner with a strong accounting team and a trusted McGrath Property Manager.

Timely: In 24 months, I will have secured enough equity in my investment property to borrow an additional $150k to fund renovations on my home.

To achieve your goals, break them down into weekly, monthly and yearly targets. Create a detailed checklist that outlines what you need to do at each stage and when. This keeps the big-picture goal practical and helps you build consistent momentum over time.

Step 3

This step is about tracking progress and celebrating success.

Use the checklist you created in Step 2 to monitor your progress and tick off actions as you complete them. The more detailed your checklist is, the easier it becomes to stay focused, prioritise effectively and move from one task to the next with confidence.

There are a range of investor tracking apps and tools available that can help you stay organised and measure performance. And, of course, don’t forget to celebrate your successes, both big and small, as this will help keep you motivated and on track to achieve your goals.

Reviewing your property’s performance

To build a high-performing investment strategy, you need a clear view of how your portfolio is tracking. Setting aside even half a day each year to review your property and its performance can help you identify opportunities to reduce costs, strengthen returns and plan confidently for the year ahead.

Not sure where to start?

We asked some of our most experienced Property Managers what they recommend investors focus on, and they consistently highlighted these nine key performance criteria.

1. Are you charging the right rent?

This is fundamental to your success as an investor. If you charge too much, you may find it harder to attract and retain tenants, increasing the risk of vacancy. If you charge too little, you may not be maximising your rental return.

Review what similar properties are renting for in your area and speak with your local McGrath property manager for expert advice. It’s also worth remembering that a steady, reliable tenant is often more valuable than a short-term increase in rent. Good tenants are worth their weight in gold.

2. Review the value of your property

Has your property increased or decreased in value over the last year? A lot can change in a 12-month period. If values have increased, your equity position may have improved, which can create options for future investment or loan strategy reviews. Your McGrath property manager can help organise an appraisal so you can better understand your property’s current market value.

Having a strong team around you can make a meaningful difference to your investment performance. Is your lender proactive in keeping your loan competitive? Is your accountant responsive and providing forward-looking advice? If you’re not getting the support you need, it may be time to consider alternative service providers.

Regular inspections are essential for protecting the long-term condition and value of your investment. Your property manager can conduct these on your behalf and flag emerging issues early. It’s also wise to set aside a maintenance buffer for unexpected repairs over the next 12 months.

Review the insurance you have in place for your property and confirm the cover still suits your needs. If you don’t currently have landlord insurance, consider whether a policy is appropriate to protect against unforeseen issues that could become costly over time. If you own multiple properties across different providers, you may also be able to consolidate policies and negotiate improved terms.

5. How are your properties performing overall?

Meet with your accountant to discuss your property in detail and confirm you are claiming all relevant expenses. Ensure you’re providing complete and accurate records to support your position. More on this in the next chapter.

As an investor, it’s important to understand your rental yield, or in other words, the return you earn from your property relative to its costs and income. To assess this accurately, you need to consider your rental income against your ongoing expenses. Knowing your yield gives you a clearer view of performance and helps you make informed decisions about how to optimise returns over time.

Make your investment property tax effective

As an investor you have a number of ways to make your investment tax effective. Ensuring you are claiming all relevant tax deductions is an important step to setting yourself up for success.

Here’s a look at the key items you may be able to deduct, however make sure you talk to your accountant about this in more detail.

Purchase costs

Some costs associated with purchasing an investment property may be claimable over time, while others are treated as capital costs. In most cases, items such as stamp duty and certain legal and transaction costs are not immediately deductible and instead form part of the property’s cost base. Your accountant can confirm how specific purchase costs should be treated in your circumstances.

Investment loan costs

The interest payable on your investment loan is generally tax deductible, along with eligible bank charges and loan fees. Some borrowing costs, including lenders mortgage insurance where applicable, may need to be claimed over several years depending on the cost and loan term.

Repairs and maintenance

You can generally deduct the costs of maintenance carried out on your property during that tax year in order to restore the property to its original condition, such as fixing plumbing or roof tiles, broken windows, gardening, pest control etc.

Keep in mind that you cannot claim “improvements” to the property such as an extension to the kitchen or a new granny flat.

Property management fees

In most cases 100% of property management fees can be claimed as an expense along with costs to promote and advertise your property for rent.

Other costs you can claim

• Home, contents and landlord insurance

• Land tax and council rates

• Accounting and legal costs

• Depreciation on eligible assets and capital works

Your accountant or a qualified quantity surveyor can help clarify what applies, particularly for second-hand items.

You can’t claim

• Any expenses related to your personal use of the rental property

• Utility bills paid by the tenant

• Borrowing costs where you have borrowed against the equity in the investment property for private use

• Costs relating to the purchase or sale of the investment property

Assessing your property manager’s performance

Surrounding yourself with the best team of experts can make a big difference to the success of your investment. A property manager is a critical member of this team. Assessing your property manager against key measures can help ensure you are getting the right support, protecting your asset and maximising your returns.

Here are 10 questions to ask yourself about your current property manager.

1. Do they conduct regular rental reviews?

Property cycles and rental conditions shift over time and this directly impacts your local market. Does your property manager proactively review your rental position and recommend an approach that aligns with current demand, comparable properties, and relevant state legislation?

2. Do you receive your rent on time?

Reliable rent collection supports your cash flow and loan repayments. Is your property manager ensuring rent is managed consistently and following the correct arrears process when payments fall behind?

3. Do they effectively manage your budget?

Each year you may provide your property manager with an approved budget for routine costs and maintenance. Are they managing agreed expenses responsibly, keeping you informed, and seeking approval where required?

One of the key benefits of owning an investment property is your ability to claim eligible expenses. Does your property manager provide accurate, detailed end-of-financial-year reporting that supports your tax position and helps your accountant work efficiently?

With legislation evolving across Australia, working with a fully licensed or certified property manager helps ensure your property is managed in line with current requirements. Do they keep you informed of relevant changes that may affect your obligations, costs or risk?

8. Do they routinely inspect your property? 9. Do they actively manage maintenance issues? 4. Do they provide accurate financial reports for your accountant?

Routine inspections are essential for protecting your asset. Is your property manager conducting inspections at appropriate intervals in line with state legislation and providing clear, detailed condition reports?

5. Are they experienced with your type of property?

Does your property manager handle similar properties in your area? Are they skilled at assessing the true rental value of your property and screening tenants suited to your investment strategy?

6. What is your relationship like with your property manager?

You don’t need to be celebrating birthdays together, but a good working relationship matters. Do they communicate clearly, respond promptly, and take the time to understand your goals?

Does your property manager ensure maintenance is handled efficiently, with clear communication and appropriate approvals? Are their tradespeople fully licensed and is the quality of work consistent with your expectations?

Additionally, do they monitor lease obligations appropriately? For example, if the lease assigns specific maintenance responsibilities, are these being followed and addressed early if issues arise?

Does your property manager proactively suggest smart, market-aligned ways to enhance your property’s rental appeal? A strong local property manager understands what tenants are prepared to pay more for and should be able to guide you on improvements that lift performance without overcapitalising.

Where to add value to your investment property

One of the key benefits of investing in property is the ability to make thoughtful changes and add value to your asset. In this chapter, we’ll look at practical ways to strengthen both rental appeal and long-term performance.

Before you get started, speak with your McGrath property manager about what renters in your local area are looking for and what they are prepared to pay more for.

If you are considering larger upgrades, it’s also worth talking to a McGrath Sales Agent about what future buyers respond to in your area. Planning ahead and improving your property in a way that supports both rental demand and resale value without overcapitalising is a smart investment approach.

Here are some key ways to increase your investment property’s value:

Paint

A fresh coat of paint can rejuvenate the overall appearance of a home and make it more appealing to tenants. For the strongest broad-market appeal, stick to a neutral colour palette.

Tidy up the garden

A well-presented garden helps create an excellent first impression. Consider tidying garden beds, mowing lawns, trimming hedges and choosing easy-tomaintain plants. If a fence or gate needs attention, addressing it early can lift both presentation and perceived care.

Fix the flooring

Dirty or frayed carpets are not appealing to renters or buyers, and heavily scuffed floorboards can make a property feel tired. Clean carpets thoroughly, replace them if they are beyond improvement, and consider sanding and recoating floorboards where needed.

Update the kitchen

You don’t need a major renovation to make a meaningful difference. Consider painting older cupboards or replacing doors, updating handles, replacing worn benchtops and splashbacks, and fixing any leaky or rusty taps. Small, well-chosen updates can modernise the kitchen without overspending.

Transform the bathroom

Aim for a clean, fresh and inviting feel. Consider updating fixtures or a vanity, and adding a larger mirror to create the sense of more space. If tiles are stained or the grout is tired, a refresh can help. Repainting in a neutral, modern tone can also lift the room significantly.

Add some features

Renters value convenience and comfort. Practical upgrades may include air conditioning or heating, a dishwasher, quality blinds or curtains, and strong internet capability. These can improve day-to-day liveability and support stronger tenant demand.

Add a parking space

Not every property has the scope for this, but where possible, a carport or offstreet parking can be a strong drawcard and may support a higher rent.

Outdoor living space

Simple outdoor improvements can create meaningful lifestyle appeal. A tidy entertaining area, outdoor seating or a modest BBQ setup can help tenants imagine better use of the space and may improve leasing results.

Add built-ins and storage

Storage is consistently popular. If appropriate for the property, consider built-in wardrobes and secure outdoor storage such as a shed.

Use a McGrath Property Manager

Our Property Managers are an important part of your investment team. They can share insights into what tenants in your specific area value most and help you prioritise improvements that lift appeal without overcapitalising.

How to attract quality tenants

There’s huge value in attracting and retaining good tenants. They are more likely to pay rent on time and look after your property and for an investor that is gold.

When you consider how much revenue you can miss out on when a property sits vacant for a week, a fortnight or a month, the importance of finding and keeping quality tenants becomes clear.

In a competitive rental landscape, you want your property to stand out and attract attention from multiple renters. The more applications you receive, the more choice you have and the greater your opportunity to secure the right tenant.

Here are some practical ways to ensure your listing stands out and attracts strong applications.

• Have the property professionally cleaned.

• Have professional photographs taken to show the property in its best light and help it stand out on rental portals.

• Ensure the copy accompanying the listing has a strong hook in the headline and provides concise, high-value information.

• Talk to your property manager about online promotional options on digital real estate portals and whether they are appropriate for your property and market conditions.

• Speak with your property manager about rental pricing so you are positioned competitively without pricing yourself out of the market.

• Consider offering a 12-month lease where it suits your strategy, as this can appeal to more stable tenants and support smoother cash flow.

• Where appropriate, consider clarifying garden maintenance responsibilities in the lease so expectations are clear for both parties.

• Consider allowing pets if it suits your property. Pet-friendly homes can attract a wider tenant pool and may support longer lease commitments. Your property manager can guide you on how to handle pet requests and suitable lease conditions in line with local legislation.

Screening tenants: the factors that matter most

Troublesome renters can cause big issues for property investors. They can put your rental income, your neighbourhood and your property at risk. Tenant horror stories are everywhere, however many of them could have been avoided with a thorough screening process.

Your McGrath property manager is skilled at assessing renter suitability and will review the following when assessing the strength of each application.

Credit history

A credit report helps build a clearer picture of an applicant’s current financial position. Do they have a large amount of outstanding debt? Have they recently applied for more credit? This type of information can help you understand their financial circumstances and whether they are likely to pay rent on time.

With a complete picture of an applicant’s financial situation, you are in a stronger position to make an informed decision.

Proof of identity and income

Ensuring the applicant is who they say they are is important. Your property manager will request appropriate proof of identity and income, supported by documents such as statements, payslips and identification.

Thorough reference checks

Tenant applications typically include a combination of employer, past landlord or property manager and personal references. Your McGrath property manager will contact referees to verify the information provided.

The most valuable check is usually the past landlord or property manager reference, as it can provide insight into how the applicant cared for the property and how consistently they paid rent.

National tenancy database review

Toward the end of the screening process, your property manager may complete an additional check as a final way to validate the preferred applicant. This may include identity confirmation and relevant tenancy history checks in line with legislative requirements. This step is typically completed later in the process to ensure screening is both efficient and appropriate.

Managing applications fairly and

lawfully

Tenant screening must comply with federal and state anti-discrimination laws. A clear, consistent and well-documented assessment process helps ensure decisions are based on objective criteria and supports a fair and respectful experience for all applicants.

With a thorough screening process such as the one conducted by McGrath, you can be confident the final decision is supported by facts and evidence, which also helps protect you from potential disputes.

Finding the right property manager

Having a highly skilled and dedicated property manager look after your property can make a big difference to the success of your investment.

But what qualities should you look for?

A high-performing property manager should:

• Have excellent communication skills

• Be highly effective and organised

• Be trained and educated with a focus on continual professional development

• Have in-depth knowledge of the local real estate market

• Be experienced or supported by a highly experienced property management team

• Think like an investor, with a focus on helping landlords maximise longterm performance

• Have strong references from both landlords and tenants

• Have a strong ability to negotiate and be firm when required

• Have proven systems for managing issues, including difficult tenancy situations

How do you find the right property manager to join your investment team?

Here are a series of questions to ask your shortlisted property managers:

• Who will be my primary point of contact, and how long have they been with the company?

• Other than your letting fee and management fee, what other fees should I be aware of?

• What is your process for managing rental arrears, and how do you keep owners informed?

• How many similar properties do you manage in the area?

• Are your tradespeople licensed and appropriately insured?

• What ongoing training does your team undertake each year?

• How often do you inspect properties in line with state legislation, and what reports do you provide?

• What online tools do you use, and can I access real-time or regular reporting?

• How do you screen tenants and assess application quality fairly and consistently?

• What is your typical average days on market for comparable properties?

• What is your vacancy rate across your rent roll?

• What is your list price to lease price ratio for similar homes?

• What is your team culture and how do you support consistency of service?

• Can you provide recent references from landlords and, where appropriate, tenants?

The McGrath property management

difference

At McGrath we see property management as more than day-to-day oversight. We combine a national network with highly trained property manager teams and proven leasing systems to protect your asset and support stronger longterm returns. The figures below provide a snapshot of the scale and experience behind our approach.

34,000+

400+ 150+ properties under management years of experience dedicated property managers offices, and growing

35+

With McGrath managing your rental, you can feel confident you have a team fully committed to optimising your investment through clear communication, careful compliance and strategies that keep your property well positioned in any market.

To get in touch with your local McGrath property manager today, visit www.mcgrath.com.au.

Disclaimer

All information in this eBook has been obtained from sources believed to be reliable. McGrath Limited and its subsidiaries, together with their directors, officers, employees and agents, have used their best endeavours to ensure the information contained in this eBook is accurate, however it has not been independently verified and no representation or warranty is made as to its accuracy or completeness. Any recommendations, views, guidance and forward-looking statements are opinions only, not guarantees of future performance or advice, and should not be relied upon as such. You should make your own enquiries and, where appropriate, seek independent professional advice before making any property, financial or investment decisions. This eBook is to be used as a general guide only. © McGrath Estate Agents 2025

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