There’s no doubt that having an investment property has lots of benefits. Future financial security, extra passive income, ability to leverage it to buy more property and the fact that rental income can essentially pay off your own mortgage. That being said, being a landlord does have its potential pitfalls, so we’ve put together a helpful checklist to follow so that you can be sure that your life will be as easy as possible and your investment as profitable as it should be.
Understand the Law
As a landlord, it’s essential to have at least a basic knowledge of the laws and regulations that govern renting in WA. These cover things like security bonds, rates and taxes, damages, repairs and notice. Knowing what your responsibilities are will help protect yourself from costly fines or litigation further down the line. If need be, get professional legal advice to make sure you’re up to speed - it’s worth it for the extra peace of mind!
Engage a Good Property Manager
Making sound investment decisions is as much about time and resource management as it is about money. A good property management firm is worth every penny as they can save you time and effort in a number of areas. These include evaluating the market, determining a competitive rental price, creating a marketing campaign to secure a tenant, answering tricky questions, screening potential tenants and maintenance your investment property.
Know How To Manage Your Cashflow
Maximising your return on investment is always essential. Assess your financial situation and ensure that your property is well presented and maintained (including performing any necessary renovations) so that your rental return is as high as possible.
Have A “Rainy Day” Reserve
When you’re the landlord the buck stops with you, so it’s essential that you discuss a maintenance plan with your property manager and ensure that you have a cash reserve to access in case the worst happens and urgent repairs are needed.
Always Be Prepared for End Of Lease & Re-Leasing
Being prepared for the end of lease by advertising for new tenants at least 3 months prior. This will help to minimise (or hopefully eliminate entirely) vacancy periods. Remember, you’re the one left paying for everything if the property is empty!
Have An Eviction Plan
You can keep your fingers crossed that you’ll never have to use it, but you need to know landlord and tenant’s rights and have a plan in place just in case. The process can be quite costly, so make sure it’s covered by your landlord’s insurance.
Streamline Your Finances, Accounting & Paperwork
This relates to our earlier point about how you invest your time and effort as well as your money. Choosing a management plan that pays all invoices and rates on your behalf will save you lots of time and hassle throughout the year and especially at tax time (as you should receive a detailed EOFY statement from your management company).
Thinking of taking the plunge and building your own investment property? We can help you build a house in a great development like The Pocket that’s going to ensure a stress free and profitable life for you as a landlord. Get in touch with us today to find out more!