Owning an investment property is like running a small business. There are risks and rewards and itâs important to maintain good records for administrative and taxation purposes.
One of the reasons property investment is popular is because the investor is, for the most part, responsible for the performance of their investment.
The biggest mistake many property investors make is not keeping up with regular maintenance. In the long run this is counterproductive. Unkept properties will not increase in value as much as others, your rental income may be lower and tenants could be less likely to respect the property.
The best way that property investors can minimise ongoing expenditure is to initially purchase lower maintenance properties which are structurally sound. Of course, even the best investment properties need occasional maintenance. Many of these costs are tax deductible so, over time, the investor is rewarded by higher returns.
Property owners dread the prospect of a tenant who damages the property, and thankfully this is a rare occurrence. One of the best ways to avoid this happening is to ensure the property is in top condition.
Most tenants will keep a property in the condition they find it. Itâs about mutual respect, and happy tenants are more likely to stay in a place longer which is a very desirable outcome to property owners, particularly in current market conditions.
You should employ an experienced Property Manager to protect your asset. Apart from finding tenants, collecting rent and seeing to the administration of your property, a professional Property Manager can access industry databases to see if a tenant has a history of non-payments or property damage.
Some 60 per cent of all rental properties are managed professionally, meaning that investors who use this service can achieve a competitive advantage over those that are managed privately, particularly in the selection of tenants and care of the properties.
Property management fees are fully tax deductible, which makes them even more attractive, particularly for those people who lead busy work and family lives. Employing a Property Manager means you wonât have to deal with the day to day issues of finding the right tenants, arranging the lease, collecting the rent, home inspections, responding to maintenance requests and complying with the Residential Tenancies Act.
In summary, for those investing in property, it is recommended you have professional property management, along with starting a maintenance fund by regularly setting aside small amounts of money to meet occasional needs.