Being the owner of an investment property is similar to running a small business. There are rewards as well as risks and it is very important to maintain good records for administrative purposes.
The biggest mistake many property investors make is not keeping up with regular maintenance. In the long run this is counter-productive. 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. 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. It’s about mutual respect, and happy tenants are more likely to stay in a place longer which is a very desirable outcome to property owners.
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 won’t 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, we always recommend professional property management, along with starting a maintenance fund by regularly setting aside small amounts of money to meet occasional needs.