- Talk to your accountant – It is wise to obtain advice from your accountant before purchasing an investment property
- Know the market – Understand how much your property is worth and how much you can lease it out. Make sure you are offering your vacant property at the current market value to avoid a lengthy and costly vacancy factor.Trying to increase the rent by a small amount can add up to a lot if the property sits vacant. Better to have a payer at a fair price than nothing at a dream price.
- Landlord responsibility – It is good to be aware of the rules and responsibilities which binds tenants as well as landlord. It is always good for the landlord to have a grasp of even the most basic consumer affairs laws relation to rental properties
- Advertise your property – put it up on gumtree, newspaper, facebook and etc try to maximise exposure
- Tenant Screening – always good to meet up with your prospect. What you have on paper might differs when you meet face to face. Have 100 points check. Check on their reference, call up and verify. ALWAYS try to retain a good tenant
- Black and white – Documentation can be tedious but it is always good to have everything supported in writing. Forms can be download from online – https://www.commerce.wa.gov.au/publications/rent-agreement-form-1aa
- Be aware of tax benefits to which you are entitled – There are many tax rules that must be followed in order to claim income and expenses properly on an investment property. You need to know what you can claim, what documents you need to provide and to have a good system for safeguarding these. The Australian Tax Office’s website is a good starting point to understanding what you can claim. However, your accountant or tax agent will advise on issues that relate to your specific circumstances. Ensure you understand all implications regarding negative and positively geared property, as well as capital gains tax.
- Have a few good trades or handyman that can work with you on your maintenance.
- Don’t assume you are covered for everything – LANDLORD INSURANCE. Investing in a property can be exciting but renting it out can be risky. Major landlord insurance provider cover landlords for damage or theft by tenants, loss of rent, rent default, contents cover, liability cover, floor cover and clean-up costs associated with illegal drug production and etc.
LAST BUT NOT LEAST
- Emotion – Although sometimes difficult, it is a good idea not to become emotionally attached to your property.An investment property should be treated as such. Some landlords treat it as though someone else is living in their home and become too emotional about the property. Consider your investment property as a ‘Bricks and Mortar’ savings account. Maintain a professional relationship with your tenant, to avoid any misunderstandings.
So what do you think? Are you one of those that can do it all. It is possible to manage your investment property, but it is a lot hard work, time consuming and it may not fit around your work and family commitments.
Alternatively, you can always engage with a property management service – call Iris at 0421 953 097