If you are an aspiring property investor and are looking to buy your very first rental property, it s important to research all the potential pitfalls you could come up against along the way.
Knowing where to start and the most suitable type of rental property to purchase are the single most important aspects you will need to address. The more people you talk to, the more opinions you will get, which can be a little frustrating for new property enthusiasts.
Before we made our first property purchase, we hired the services of Chan and Naylor, who specialize in all aspects of establishing a successful property portfolio. They guided us through right down to the potential tax benefits land lords can claim, right up to the accountant management side of things, including good solid advice on smart property buying.
Location location!
Yep, it s all about location. Think with your head, not your heart, buying a rental property needs a different approach compared to buying your family home. You need to factor in minimizing your vacancy rate. So buying a rental property on a farm, 500kms away from the central business district doesn t make alot of sense as far as attracting potential renters. Ideally, your rental property should be located within walking distance, or close to public transport and near to shopping centre s, schools and universities etc. This will maximize your chances of renting the property out when the time comes.
Managing your property
Managing your property correctly is another component to consider. Employing a real estate agent to manage your property is how 82 of Australian property investors deal with their property management. There are no ongoing fees to pay your agent, your rent cheque will be sent to you factoring in a 7 agents commission deduction. A property manager will manage every aspect including collecting the rent, and managing the up keep and maintenance of your property. They do suggest shopping around and getting the right property managing agent that works with you on getting whats best out of your investment.
Maintaining your investment
The last thing you want is for your managing agent to be calling you every week asking you to folk out money for on going repairs such as moisture problems in the bathroom, a failing hot water service, or termites. Ensure you engage a reputable building inspection company for a detailed property report before you buy. The extent of maintenance can also be determined by the type of property purchased. ie: house or unit, which is a whole different subject you will need to research.
Landlord Insurance
An important part of being a landlord is to cover your self. It is always advisable to get landlord insurance just in case any unforeseen accidents may happen. Such as a water tank were to blow up, this may also involve the tenant staying in alternative accommodation while the repair is done, which could be down to you to fund. Make sure you research or ask your managing agent to inform you of your responsibilities as a landlord, they could also advise you on what type of insurance would be required.
Any rental investment property will require basic fundamental up keep from time to time, and your job is to apply due diligence when purchasing a property so it will require minimum on going expense. Basic maintenance for any rental property will require a cosmetic renovation every 4 5 years requiring new http://carpetsonthemove.com.au and paint.
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