When you invest in property, it’s natural to want to get as much as you can out of it and it’s very important that you have a plan to do so. This is generally a long-term commitment and there are a few steps that any property investor can take to maximise their property investments. We have narrowed it down to the 4 main things to help you achieve your specific investment goals.
1. Buy well.
Easily said and pretty simplistic advice right! I can’t stress enough that you need to make a carefully considered decision on the type, condition, location and ownership structure of the investment property that you decide to buy. Don’t fall into the trap of buying another house that you’d like to live in, as you will probably pay more than you need to. Research is critical and you should investigate things like surrounding infrastructure such as transport, shopping, entertainment options, medical facilities, schools and so on depending upon who you think your tenants are going to be in demographic terms.
Many people will buy an investment property to take advantage of an implied development opportunity. Just make sure you are not paying a big premium to the current owner for implied potential that you may have to invest further in to extract. That’s not to say that buying a property with development potential is a bad thing – far from it. What I am saying is do so with an awareness of how that potential can be unlocked and what it might cost you to do so!
2.Renovate your property.
Property investors frequently renovate established properties they’ve purchased when it makes sense to do so. There are several reasons for this, including making the property more attractive to tenants or buyers and to increase the value of the property. The latter is especially important because it means that you won’t just get more interested buyers or tenants, but you’ll also potentially get higher rental yields or capital gains.
Renovating the property can be as simple as upgrading the fixtures and adding a new coat of paint to upgrading rooms or adding new ones. Remember though, not all forms of renovation will add maximum value to your property, so it is advisable to seek professional guidance first, so you can get the most out of your project.
3. Find the right tenants.
The success of your property investment depends largely on the quality of tenants who live there. Ideally, you want tenants who pay on time, take care of the property as their own, and will stay there for as long as possible. Of course, no tenant will be perfect, but you can at least get the best one with the help of a property manager and the fall back to Landlords insurance which is a must have.
While you can look for tenants on your own, a property manager has the experience of doing this while focusing only on high-quality tenants that match your specifications. On top of that, they will also provide with you with other services, such as collecting rent on your behalf, conducting regular inspections on your property, and intervening when an issue arises with your tenant.
It’s important to focus on the type of tenants you would like to attract early on since they’re much easier to keep than to constantly find new ones. Tenants who pay on time and stay in the property longer will also help provide you with a healthy, regular cash flow.
4. Use a mortgage broker.
If you’re just about to purchase an investment property, it’s important that you have all the information available to you in order to make the best possible decision for you. With regulators forcing Banks to review how they treat investor loans, now more than ever a good Mortgage Broker will help you get the best facility for you that meets your needs at the best price. A good Mortgage Broker will undertake a through review of your position and help you clarify your objectives in order to identify the loan facility that will suit you the best.
Why is a mortgage broker’s work important in helping maximise your investment? They have access to the loan products of a very wide variety of lenders and can refine the most suitable option for you. They will help you with getting the loan structure right and make sure that your application is presented professionally to the lender you choose in a timely and efficient manner. All of course at no cost to you!
To maximise your property investment, it’s important that you take a proactive approach in ensuring that you get the right property, get the right tenants, add value to the property if it makes sense to do so, and get the right loan and structure to help help you stay focused on maximising your investment.
Written by Brad Snell.