Property investors would love to be able to buy in an area before it becomes up and coming in order to buy cheaply and reap the benefits of a subsequent increase in property prices. There are certain indications that a suburb may boom, but none of them are set in stone – you can never be sure.
Check the area for the following:
Choosing a property manager
When choosing a property manager you need to select someone who knows the law and is confident in applying the law. You need to choose someone who will pay attention to the finer details and continually strive to maximise the return on your investment.
Education, ongoing training programs and seminars are also important for a property manager to keep abreast of changing legislation and market conditions. Property management is no longer just collecting the rent; it is a comprehensive management service which should be provided by a professionally trained property manager.
What questions should I ask when engaging a property manager?
Tenants should be treated with respect.
There is significant competition to attract quality tenants. Tenants require, and have the right to, reasonable standards of housing and living conditions.
Relationships between tenants, lessors and agents should be built on respect. Tenants deserve to be greeted with respect at all times.
Under federal and state anti-discrimination laws, real estate agents cannot accept discriminatory direction from lessors. Both the agent and the lessor are legally liable if complaints are made. It is neither fair nor lawful to pressure an agent to break the law.
When selecting tenants, the only requirements that can be addressed are:
You do have the right to choose the most suitable tenant provided no unfair discrimination occurs.
Leasing your property
Why do properties remain vacant?
Your agent should make every reasonable endeavour to locate a quality tenant to suit your investment property and should keep you updated on a weekly basis on the progress in obtaining a tenant.
Engaging maintenance people
It is important that you engage tradespeople that are adequately insured and licensed to minimise your liability should a tenant injure themselves from faulty workmanship.
Be sure to keep your investment property records (rental income statements and invoices) in a safe location. These will be required for taxation purposes.
Keep the lines of communication with the real estate agent open at all times. Honest, open communication is the best way to maintain a happy and professional ongoing relationship.
Routine inspections should be regularly carried out on rented properties to ensure that the tenant is caring for the property and also to ensure that the property is well maintained and safe for the tenant to live in. A lack of maintenance on a rental property not only hinders capital growth of the investment, but also could lead to an injury claim if the property is not safe.
Landlord protection insurance will provide you with peace of mind and ensure that you are protected in that unexpected situation for loss of rental income or property damage. Landlord insurance is a tax deduction. When choosing a landlord insurance policy, it is important to carefully read the terms and conditions.
Safety Switches and Smoke Detectors
Help save lives! Does your property have an electrical safety switch and smoke detectors? For a minimal fee you can have peace of mind that you are providing a safe environment for your tenants. When installing a safety switch ensure that you engage a licensed electrical contractor.
They are small – but can cause big problems. It is recommended that you have an annual pest inspection carried out on your property by a professional. For a minimal annual fee, you will have peace of mind that your property is protected and safe.
It is recommended that you engage a professional building inspector once a year to conduct a thorough inspection of the property to detect any potential building defects.
Engage Qualified Tradespeople
When carrying out maintenance at a property it is important to utilise a qualified tradesperson who is licensed to carry out the work and who has adequate insurance to protect you against poor workmanship in the event of a tenant injury from the work carried out.
Professional Pool Report
If you have a pool at your property it is recommended that you have at least one professional pool report carried out once a year from a reputable pool maintenance company to ensure that the equipment is in good condition and not corroding and to ensure that the pool surroundings, including the fencing complies with local council laws.
Promptly attend to maintenance By promptly attending to maintenance you are reducing the risk of possible tenant injury and avoiding a small repair becoming a large costly one.
Budgeting to upgrade & improve a rental property
Over a period of time rental properties need to be upgraded. Taking the time to prepare a budget on your investment property will help you estimate the annual income against expenditure. You will also be able to put aside a set amount to save for maintenance and property improvements.
This article courtesy of the Real Estate Institute of Australia