How can property investors leverage their property managers to create and implement investment goals for the year?
Actively managing your property investment portfolio is vital to the success of any positive investment return. However, this may not always be as straightforward as it sounds, and the best way to approach your investment is to treat it like a business. This is where your property manager can be an integral part of your approach, as they can help your investments achieve premium results.
Your property manager will help you keep your own investment goals in mind, such as capital growth and a steady rental return. The rent you receive will ultimately help you pay off your investment, and the rental return will also be a key factor in determining the future sale price of your property.
Make your property your business: Your property needs to remain competitive to attract tenants, and as such, your property manager will help you review the rent regularly, say every six or 12 months (and with every change in tenancy), to ensure it remains competitive in a market sense. Speaking to your property manager about the current average rent for similar properties in the area will help you determine if your return is in line with comparable rents in the area. Your tenant should be paying fair market value and if you decide to increase the weekly rent, ensure it is a gradual rise, rather than a one-off spike that can cause your tenant/s to bail. This will help you reduce the chance of any potential vacancies, ensuring you continue to receive a regular stream of income.
Maintaining cashflow is another vital part of your investment strategy, and this is where your property manager can be a valuable resource. Your property manager will help when it comes to chasing arrears, ensuring you are actually receiving your income as required. A good property manager will initiate reminder notices via SMS, email, phone or written correspondence to tenants who fall behind in their rent payments, and may even conduct personal visits to follow up any tenants in arrears.
Your property manager can also talk to you about how to approach your investment portfolio as if you are expanding your business. Control your personal spending and plan for the future by investing more than the minimum into the mortgage if this is part of your strategy. Paying more off the mortgage than you need to will set you free to expand your portfolio and can potentially set you up with a tidy nest-egg at retirement.
When it comes to growing your property portfolio, your property manager can discuss how to use the equity you have in any current investments as a “deposit” for a new investment property. The more equity you have, the more financial options you possess, and by using the equity in your investments, you could be well on the way to further smart property investments.
Expense education: Finally, your property manager can assist in identifying investment property expenses that can be claimed on tax. Claimable expenses can include advertising for tenants, bank charges and body corporate fees, not to mention maintenance outlays such as cleaning, gardening and pest control. However, it is always wise to consult your financial adviser in these situations as well, to ensure you are receiving the full range of financial advice.
About the Author: Lauren Kirk
Lauren Kirk is the Business Support & Development Manager for Property Management at Raine & Horne.