Investing in property is a huge step that many Australians take towards building their asset portfolio and increasing their passive income.
According to data from the Australian Taxation Office (ATO), 72.8% of individuals that own an investment property, own just the one property, 18.9% owned two properties… and amazingly, only 0.9% of individuals owned six or more.
Going through the process to invest in property is often long and tedious. But in the long run, it can be a very rewarding process.
Although you may feel like you’ve planned out each step in the investment process, you might find that there are some other areas that you have forgotten to address.
Here are our five secret tips that most property investors forget to address:
1) Find a good property manager and let them do their job
You’ve bought your investment property and you’re planning to manage everything on your own to save money.
Some of the things you’ll be managing include organizing the collection of rent, maintenance, finding and qualifying suitable tenants, knowing the laws associated with rental properties and be able to conduct regular rent inspections… and how to handle the many situations following.
You may not realize this now, but managing a property is almost like a full-time job. If you want to buy more investment properties, you don’t really need this unnecessary burden.
Our tip is to find a professional property manager. A property manager is usually a licensed real estate agent that is an expert in their field and who will control everything for you. You may not be saving the money that you had wanted to, but if it means getting the best value out of your property and buying your time for others things in life, then it definitely is a good option to take.
2) Do your sums appropriately
Investing in property has been proven to help in long-term wealth. So, people often feel that they need to have a few properties on the go at the same time. Unfortunately doing this will probably cause a financial burden for you later on.
Make sure that you can maintain your mortgage repayments over a long-term and account for any contingencies such as extended vacancy periods or expected maintenance periods.
3) Pick the right mortgage to suit you
According to figures from the Reserve Bank of Australia, interest-only owner-occupier mortgages are at their highest-ever levels with 28 percent of borrowers signing up to debts that they are not paying off.
Whether you choose a fixed rate loan or a variable rate loan will depend on your circumstances, but consider both options carefully before you decide. The Australian Securities and Investments Commission has gone into detail about choosing the most appropriate home loan in your situation.
You can find this by clicking on the following link: https://www.moneysmart.gov.au/borrowing-and-credit/home-loans/choosing-a-home-loan
4) Make your property attractive to renters
If you’re struggling to get tenants into your house, have you looked at whether your house is appealing enough to potential renters?
Spending quality time on renovating your property to increase the rental return can create more cash flow, which of course works in your favour. The trick, of course, is to know which renovations are going to increase the value of your assets.
Some ideas to improve the investment properties rental potential include washing the walls and repainting them, putting up new blinds or curtains, installing new door handles and installing a low maintenance garden.
5) Take a long-term view and manage your risks
It’s easy to get excited about investing in property and the thoughts of reaping in the money rewards after.
What investors tend to forget though is that property investment takes time and effort for you to reap the rewards (yes, we can hear your groans.) Approach the property investment game with patience and persistence. You will gain far more success and wealth than if you are constantly trying to seek out the “next big thing.”
Just think, the time that you dedicate to increasing the equity of your first property, you can leverage into your next property (and so on and so forth.)