Now that we’re into a new year, the time is right to consider ways to maximise your decision to be a property investor.
If you’re considering a first (or next) investment property, be sure to avoid buying a property with high rental vacancy rates. If for example, some significant new developments are underway or completed, tenants might be spoiled for choice as the new apartments create a short-term oversupply situation. Property investing is a long-term proposition. However, try and avoid a vacant house or apartment even for a short period if possible.
Likewise, it’s important when buying an investment property that you consider the demographics of the area. For example, in a suburb or town dominated by a university, buying a small two-bedroom unit with tiny bedrooms will not attract the student market. Most students prefer to share accommodation arrangements for budgetary reasons.
Once you have purchased the right investment property, choosing the wrong property manager is the next trap to dodge. An experienced property manager such as Raine & Horne deals directly with your tenants, which saves you time and worry over marketing your rentals, collecting the weekly rent, handling maintenance and repair issues, responding to tenant issues, and renewing or even removing unruly tenants.
While a property manager can look after a range of matters for you, the savvy investors recognise they must be prepared to spend some money when repairs are required rather than allowing a broken fence, leaky toilet or faulty oven to cause serious problems. It’s also essential you listen to the advice of your property manager – otherwise, this is like flushing money down the drain.
At the same time, there is always a risk of being overgenerous to good tenants, and spending on additional items that will eat into your cash flow. Avoid not having landlord insurance or insufficient cover.
If you feel you need some advice about landlord insurance, be sure to talk to your Raine & Horne property manager.