When it comes to managing your investment property to ensure you get the best possible returns, nothing beats getting the best tips from people that have done it before you.
So here are seven tips on how to best manage your investment property;
Keep Your Property In Excellent Condition
There are many benefits to keeping your property
in
top
notch condition including
attracting
high quality tenants, reducing unexpected maintenance, setting a high standard in the entry condition report and the ability
to
maximise the rental return.
That doesn’t necessarily mean that large renovations are needed, rather regular pre-emptive maintenance and incremental feature updates are the best way to balance the cost against the equity and rental return.
Keeping your property in excellent condition also sets the standard for your tenants and by keeping up appearances with a fresh coat of paint as required, attending to any necessary repairs or even installing an air conditioner or dishwasher to attract more tenants, you will reap the rewards with a top rental price.
Additionally, you are more likely to attract a tenant who pays their rent on time and treats the property with the same respect as they would their own home.
Manage Your Properties Like a Business
When it comes to managing your investment properties, you should think like the owner of a business, because that’s essentially what you are!
Use a professional property management tool like RealRenta.com.au, take an active interest in all aspects of property management. Invest in decent replacement parts and check the references of repairers to ensure that property maintenance is completed to a high standard.
Like any other business, you need
to
insure the investment property and have landlord insurance for when things do go wrong. Having effective systems in place can save you a lot of money and time down the track.
Keep Records
If you had hundreds of thousands of dollars invested in the stock market it would be common sense to check its value every now and again, the same is true for the market value of your investment properties,
organise an independent valuation every 12 - 24 months. These are excellent records to keep and will be a guide to stop you from
over
capitalising on improvements by pacing them with the accrual of equity and land value.
Don’t Get Emotionally Involved
It’s easy to take it personally and react emotionally when it comes to one of the biggest investments you will ever have.
However you need to understand it is a business and things that you don’t like such as tenants missing a rental payment or not looking after the property are inevitably going to happen. Keeping a cool head and maintaining a professional approach will always result in a faster and better outcome for you.
Furthermore if you have the insurance,
tools
and processes behind you then any issues that arise should be manageable. A communication platform such as RealRenta.com.au logs all communication between tenants and landlords and can be invaluable if disputes arise.
Keep an Arms Length
When managing your own investment property, it is good to have a healthy relationship with your tenants, but getting
too
cosy with your tenants can actually cause a world of pain for landlords. Firstly, there’s more chance of tenants taking advantage of your personal relationship and making requests you don’t feel you can refuse or asking for extensions for rental payments. This is why having a property management tool is a must to facilitate professional communication.
Secondly, if you stretch the friendship and pop around to visit too frequently, the tenants might end up accusing you of breaching their legal right to quiet enjoyment of the rental property. Again, this is where the benefits of a property management tool to establish a professional relationship like RealRenta.com.au, is invaluable.
Stay On Top Of Rent Reviews
To
maximise the return on your investment it is essential to keep on top of where the rental market is heading.
Conducting annual rent reviews will ensure you always achieve the best possible price and therefore returns on your asset. Often, by increasing your rent in line with the market, you can decrease the divide between rising monthly mortgage repayments and the contribution your tenant makes each month.
But you can’t get too greedy as it can have the opposite effect and alienate a good tenant, who might decide to move out. For this reason, you need to weigh up whether gaining a bit more in the short term could see you lose out in the long term because your property is overpriced and remains vacant for longer.
Having your property vacant even for a week can eliminate any profits you may have got from rent increases. It is always better to have a
good
long
term tenant than risk having your property vacant and you may not find the next tenants are as good.
Have Good Help!
All
licenced property
managers
utilise property management software to manage their tasks so it makes sense that self-managed owners should use a similar system. A good business
owner
recognises that they can’t do it all themselves.
Employing the right processes and using the right tools to help will be a great benefit in the long term. As previously mentioned a tool like RealRenta.com.au will collect the rent, do invoices and receipts, send rent reminders and breach notices automatically, handle maintenance issues and has a communications platform to log all communications with the tenants. Best of all, it is all done within the parameters of the laws pertaining to rentals and in a professional manner.
By using a good property management tool like RealRenta.com.au and paying a small,
tax deductible fee for the services, you will ultimately free up your own invaluable time to do what matters most – finding more lucrative rental properties to add to your portfolio.
Jason Gwerder
Thursday, 27 December 2018
