More than two million Australians own an investment property, and the importance of ensuring the best possible value on return is imperative to many. Investors can maximise their return and enhance cash flow by avoiding these common investing pitfalls:
Failing to Financially Plan
A solid financial plan is a key component to the success of your property investment. Seeking expert advice early will not only allow you to structure your investment in a tax-effective manner, but also ensure you maximise your investment potential through both deductions and depreciation.
Leasing a property is a business arrangement and landlords should take a professional approach to it. Although renting to friends or family can be convenient, it can often come at a commercial cost. Blurring the lines between friendship and business can make it difficult to address any issues with the tenancy and/or maintain rental values. Engaging an experienced property manager will not only save stress and time, but also ensure compliance with all legislative, safety and tenancy requirements, mitigating a range of risks.
Ignoring or Delaying Maintenance
Whilst many investors are focused on the monetary return from their property investment, a good property manager will ensure this is done hand-in-hand with proactive property maintenance. Addressing maintenance isssues promptly stops small issues becoming larger problems, helping retain good tenants and maintain both the condition and market value of your property.
Many landlords have the wrong type or an inadequate level of insurance coverage. Although maintaining home insurance is generally a condition of finance, an estimated 40 percent of landlords do not have specialised landlord insurance - leaving themselves unprotected for loss of rent or damage to the property. Investors should review their insurances every two years at a minimum, including reading the pesky fine print.
Price it Right
Ensuring your property’s rental value is maintained at the market rate maximises your return on investment. An over-inflated rental asking price can actually cost you money: a $570 per week property sitting vacant for three weeks will actually return less than a $550 per week property let all year round. Keep in step with the changing market through incremental rental adjustments drawn into your lease, on a six or twelve monthly basis, wherever possible.
Make the most of your investment: our award-winning property management team have the expertise and market insight to ensure you maximise your return. Contact us today on 9091 1400 for a rental comparison or complementary investment report.