We always look for safe ways to make money; I know that most people I deal with are looking for something tangible to invest in. A lot of investors choose property because, unlike the stock markets, they have something solid that they can see and visit, that they own. Investors are generally confident that property prices will only increase and nothing too bad can go wrong. Or can it?
Here are my seven tips on how not to gamble with your investment property:
- Do your back ground checks on everything financial. When purchasing, take the time to investigate the best loans. Will it be flexible or stable depending on your investment strategy? Should you use your bank or consider a mortgage broker? Look into all options before you commit. Don’t forget to include insurance in here. It is critical to insure your property for damage, public liability and tenant insurance.
- Have a building and pest report carried out prior to purchase. I know it seems like an added expense, but imagine how much it would cost to find a major flaw after you have handed over your life savings plus committed to a 30 year loan.
- Hire experts to assist you. Speak to companies who specialise in anything you may need including renovations, wealth growth, termite companies and tax specialists. There is always someone out there who is a specialist and who may be able to save you a lot of money in the long run.
- Engage the services of a Property Manager. They can lead you to some experts and share their wealth of knowledge with you. Property Managers are highly trained in residential laws, residential rental markets, managing investments, compliance and knowing exactly what you need.
- Be involved in your investment. Attend inspections at least once a year if possible. Read the reports that are sent with each inspection. Keep on top of trends that are reported to you by your managing agent. Don’t ever be afraid to ask questions. If you don’t know the answer, perhaps other owners don’t either, there is never a silly question.
- Don’t take advise from people who are not in a good position to give it. This really hit me when I heard it. The people who have never invested, never had a rental property or never been interested, are usually the first to criticize your investment decisions. Make your own decisions based on people who have been where you want to go.
- Maintenance is a must! While it may seem that you have spent enough on purchasing a home, remember that you must keep it to a standard that attracts the right kind of tenants. Would you want to live somewhere that is run down and never gets repaired? Little things like leaking taps, can cost a fortune when the water bill arrives. You can claim maintenance and many other things on your tax and using a specialist will assist with your return on investment.
I feel the main thing to learn is that not everything can be controlled. Sometimes things go wrong, circumstances change or your lifestyle may change. Lean on people with more experience and remember to see your investment as a commercial enterprise. Try not to take any problems personally. Good luck!