Being a property investor has its challenges, and can sometimes be a bit overwhelming. By identifying key areas these challenges can be reduced, here are 5 examples which can assist with success as a landlord.
Treat your Property as a Business:
Organise the management of your property as you would a business with a business plan and bookkeeping systems. Knowing the status of your property will give you confidence and a clear view of the investments direction. Seek advice from people who can assist with your decisions such as a good accountant, tax agent and property manager.
Tenant Selection & Tenant Management:
The aim of any property investor is to find a tenant who will care for the property as if they owned the property. Sometimes this is easier said than done, however managing your tenant correctly can turn an average tenant into a great tenant. Prompt action on requests and repairs is one way to ensure they are comfortable and happy living in the property. A happy tenant will usually maintain the property to a higher standard and will often stay in a property for a much longer period which in turn reduces vacancy periods and reletting costs.
Regular Maintenance: Keeping the property in top condition by completing minor repairs as they occur will help increase the lifespan of the item. It can also delay large item replacements and costly repairs. To replace the washer on a leaking tap is cheap, to replace the water soaked vanity that leak cause is not.
Inspections and Rent Reviews: Regular inspections are more than just checking on the tenant. Inspections are used help to gauge the condition of the property and assist with the planning for renovations i.e. repainting or new carpet for the next tenancy. By planning for costly items it means funds can be allocated and there are no surprises when the time comes. Inspections are also used to review the rental price, make sure the property is always at market value but be mindful of the tenant's situation. A good tenant is worth more than an extra $10 per week.
Cash flow is Important: Once the rent has been received and after bills are paid, sometimes this can leave you less for your mortgage than expected. Larger bills such as Strata, Council and Water rates usually come in quarterly and arrive in the same month. By spreading the payment dates or allocating funds monthly for these larger invoices will streamline your funds and not leave you short at the time of payment.