How do to make sure your property is kept to a very high standard?
Ensure that the Entry Condition Report is completed thoroughly with ample photos. One of each room is not enough. Also make sure that you receive a copy of the report so that you can view your property.
Ensure a very diligent tenant screening process is through the agency. Ensure that they check tenancy databases and all references.
Ensure routine inspections are completed. At least 3 per year. Routines are not only to check on the tenants, but for maintenance, to advise if the house needs a freshen up. It's amazing what a new paint job can do to a place.
Professional photos on advertising makes a difference. We include this in our management fees. Make sure your property looks like a home, not a rental.
Preparing for tax time
There are many different reasons why people invest in property, however the main ones that I assist are those that are looking for a monthly cash flow increase, equity growth, superannuation or to bring down their annual tax bill by negative gearing the property.
With any of these forms of investing, the best time to do any larger maintenance on a property is close to the end of financial year as you will have the maintenance completed, the account paid and quickly claim it on tax and not be completely out of pocket for the whole financial year.
Around this time I normally get requests to install air conditioners, replace ovens, re-paint, re-carpet and so on. Due to the increase in maintenance items, our tradespeople do get busier during this time, so you need to make sure that you give your Property Manager and their tradesperson enough time to make sure that the job can be finalised, invoiced and paid for before 30th of June.
Keeping the properties appearance up and maintaining a modern look will always keep the rental price up too. You can't ask for top dollar in rentals if the property requires some attention. Installing modern appliances (air conditioner, dishwasher) will always push the price up slightly.
Looking to Purchase Investment Properties
When looking to buy an investment property there are many things to look into. So it begs the question of why don't investors get a rental appraisal done on the property PRIOR to purchasing? Get a qualified Property Manager (not the developer or sales agent) to attend the property and evaluate the property for rental.
Meaning, getting someone to go through and complete a visual inspection not unlike a Routine Inspection. Walk through the property, check for visual maintenance, check what can be completed to raise rental value and determine the current rental market for this property. You wouldn't buy a car without an inspection - so why buy a house without one?
Of course, a property management inspection does not take over a building and pest inspection, please ensure this is completed also. A property management inspection will only be a visual inspection and that done for the purpose of seeing if the property would be a viable asset as an investment property. We do not make financial decisions for you, this should be discussed with your accountant / financial advisor. Strictly speaking, it is a renal appraisal prior to you putting in an offer so that you have all the facts.
If you are looking to purchase an Investment Property, contact me to discuss and arrange an inspection on your behalf to advise whether the property would be a valuable investment.
To Renovate Or Not
The reason that you own an investment property is so that you can make money, whether this be cash flow, equity or superannuation. Whether to renovate a property is one question that many Landlords question.
The answer is simple – will the renovations you are considering increase the rent? If the answer to that is yes, then do it. If the answer is no, then don't. If you don't know the answer, then a simple call to your Property Manager will answer that for you.
In short, if your property is looking tired and you can modernise it, then there is a possibility of the rent increasing. If your property is still in good condition, all still working, then a large renovation probably isn't needed. Of course every house is different, however your Property Manager will know what prospective tenants are looking for in properties – which is ultimately what sets the market.
There are small little things that can be done to raise the rental price, install an air conditioner, install ceiling fans, if room permits in the kitchen install a dishwasher. These will always be sought after items in any property.
Always remember, any new appliance is not only an instant tax deduction, but a continuous tax depreciation can be claimed at tax time.