When you make the decision to become a landlord, there are a number of
ways to minimise your risks. These include:
Tailoring your investment to the ideal tenant.
There are two types of tenants in the world:
Those who choose to rent for lifestyle, who are reasonably comfortable
financially and who are living in a rental home because it suits them, and
Those who are renting because they are struggling financially, and they
live with only 1 or 2 weeks living expenses in the bank – meaning they are
always just one small emergency away from being broke.
Choose locations and types of properties that appeal to tenants in
These tend to be the more affluent established inner and middle-ring
suburbs of our capital cities.
If you think about it, when you eventually want to live off the income
from your property portfolio your income is going to be dependent upon your
tenants’ ability to pay your rent and keep paying increasing rent over the
Of course, this is not a judge of people, but I would only buy
investment properties in locations where the tenants are better off financially
rather than one week away from broke.
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Tuesday, 6 July 2021