Managing your rental property to keep up with costs.
While we spend a lot of time talking about which property to buy, managing a rental property is just as crucial to get a great investment return.
With interest rates likely to rise over the next two years, you should be acting now to lock in solid growing income and avoid big expenses.
Here’s my checklist to ensure you’re on the right track.
Your property needs an expert.
Much of the Residential Tenancy State legislation is highly complex with significant obligations that landlords must legally meet. Some people decide to manage a property themselves and rent it out to a friend. What often follows are some of the worst horror stories I’ve heard. And both parties are often at risk in this scenario.
It pays to ensure your property is looked after by an experienced property manager (agent) operating on an arm’s length basis.
The right tenant.
A bad tenant can cause significant damage, be late paying rent or skip out on the lease.
Landlords will be well advised to avoid relying on their gut feel (or prejudices) and ensure their property manager recommends a tenant with a solid record and checked references.
Keep up with the market.
Many owners simply raise the rent each year to keep up with inflation (CPI).
That’s a bad mistake. Instead, you should be ensuring your property keeps up with the prevailing rent for like properties in your local area.
The one percent rule.
Too many investors break one of my cardinal rules: Always maintain your property at a presentable and safe level.
This is important because you never know when you may have to find a new tenant or need to put your property on the market unexpectedly.
Put aside one percent of the property’s value each year and when maintenance issues arise, act without delay.
A stich in time save nine!
Author; Miriam Sandkuhler
Property Prosperity
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