8 essential tips for property investors
Investing in property is exciting, especially for new investors. Like every financial venture, there are a few things you need to consider.
Here are 8 tips to help set yourself up as an expert landlord from day one – and they will serve as a reminder for long-term landlords too.
- Know the Law
From smoke alarm regulations and pool safety to discrimination and animals, it is vital you understand the legalities involved with being a landlord.
As well as some occupational health and safety laws for buildings, there are other legal requirements when it comes to lodging of bond monies, giving notice period for inspections, rental renewals or ending a tenancy, but to name a few.
Property legislation and regulations are in place to protect both the landlord and the tenant, for many reasons; properties need to be safe to live in, and there needs to be a clear understanding of what is expected by both parties.
- Maximise the rental return
Like any other business, there are expenses involved – mortgage repayments, council rates, insurance, maintenance etc and your rent is your revenue.
You should always ensure your rental is in line with the market, and there are ways you can increase the rental income, such as by considering allowing pets (if the property allows it), and making some simple upgrades. Read more ways in which you can increase your rental income here.
When it comes to larger renovations, that leads to the next point.
- Beware of over-capitalising
Any renovations must be for profit. We don’t believe in cutting corners, and all renovations should be of a high standard, but there is a difference between essential and quality renovations, as opposed to desirable and top-end (of course, this will also depend on where the property is located, and what your potential tenants are likely to expect in their rental; high end tenants will probably expect more).
You need to stand back from the property and renovate with your business head on.
For instance, rewiring to make a property safe and bring it up to safety standard is essential; however, installing a state-of-the-art kitchen, with expensive fittings might not add value in terms of both rental returns, or increase in the property value later down the track.
- Essential marketing
You can’t lease your property if nobody knows about it – so having a good marketing plan is essential. Yes, you can stick a notice in the local paper or on gumtree, but a good property manager knows the type of tenant your property is likely to attract – and knows where they are looking.
Our vacancy rates are always well below Newcastle’s average vacancy rate thanks to our active team and intense, expert marketing. For instance, quality photos, well-written descriptions and marketing on over 15 websites makes sure our properties get seen by the right potential tenants.
- Screen tenants
A good tenant, who pays on time and cares for your property will ensure a smooth, stress free tenancy; a bad one can be extremely costly and time consuming.
Checks include rental and employment history, and in some cases, you may even want look online and check social media for any extra clues into who you’re about to let live in your property.
While credit checking and referencing are essential parts of finding your perfect tenant, asking the right questions, such as why they are moving, can go a long way to assessing who should be living, and ultimately caring and paying for your investment.
- Regular inspections
Inspections aren’t about poking into how people live, they are about monitoring the state of the property. Tenants don’t always report maintenance issues which may potentially be expensive if they are not addressed now.
It’s also important to inspect a property before a tenant moves in and after a tenant moves out. Taking photos of what the property looks like before a tenant moves in and having the tenant sign off on the state of the property can help avoid any future differences of opinion when a tenant moves out.
- Keep on top of maintenance
The biggest complaint about landlords from tenants is maintenance. Legally the property has to be safe to live in, so the property must meet safety gas and electrical standards.
Maintenance issues, such as blocked drains and faulty white goods, should be repaired promptly and professionally; a botch job will cost you in the long run.
- Use an experienced property manager
Remember the saying, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur”?
Yes, you can manage the property yourself, but given all the above points, wouldn’t it be easier and more cost effective to use a trusted professional? We do all the above and more!
Having been managing property for nearly 50 years, as well as saving you time and stress which can sometimes go with property management our team instantly adds with hints, tips and professional advice.
Furthermore more, our online landlord’s portal gives you all the information, financial and otherwise at your fingertips, and any property management fees are usually considered tax deductible.
Drop into the Cardiff office or give us a call on 02 4954 8833. Or send us an email at mail@apnewcastle.com.au – we’ve helped many people realise their financial dreams through property and we’re keen to help you.