3 tips for polishing up your investment property portfolio
Believe it or not, the end of another year is almost upon us. Department store and supermarket windows are fringed with tinsel, Christmas music is slowly infiltrating our favourite radio stations and temperatures around the nation are creeping higher and higher each day.
When the time comes to replace your calendar once more, it's a great opportunity to look back on the past year and how it all went. Hopefully, you've achieved any goals you may have had, but if you find yourself lamenting a lack of financial progress, maybe the changing year is the perfect time to rejuvenate your property investments. Here are a few end-of-year tips to make your real estate portfolio work better for you.
Pick your spots wisely
When you're new to the property investment game, or just looking to make additions to your existing portfolio, a good buyer's agent will tell you that the secret to maximising returns is knowing the best location to buy. While the strongest rental markets are found across most of Australia's capital cities, CoreLogic RP Data figures from October 2015 show that the largest value growth is being accrued in Sydney, Melbourne and Brisbane.
The high median house prices in these major cities – passing the $1 million mark in Sydney in July 2015, according to Domain – mean that putting together the necessary capital to buy is not exactly easy. However, should you have access to the required funds, those high costs can work in your favour as an investor. Tough buying conditions mean people are likely to remain renters for longer, increasing the demand in the market and potentially driving your rental price up.
An expert investment property manager can help make things easier for you.
Use effective property management services
Whether you've just purchased a new property or are looking to improve your returns on something you've owned for years, an expert investment property manager can help make things easier for you. As profitable as owning investment property can be, all of those gains can begin to seem insignificant if the maintenance of your portfolio is causing you headaches. At this time of year, most people have enough on their plate with Christmas and New Year, so freeing yourself of various property management burdens is a smart move.
From advertising vacancies and finding tenants to arranging regular maintenance and dealing with legal issues, professional investment property managers can take all of the necessary day to day technicalities away from you – all you have to do is collect your income!
Realise your property's full potential with renovations
Despite the apparently favourable conditions for landlords, the market can always swing against you – no matter where your property is located. With increased housing development becoming available, CoreLogic RP Data Head of Research Tim Lawless said in October 2015 that "we have seen a significant slowdown in the rate of rental growth over the past couple of years and we expect this trend to continue over the coming year".
It's not a great sign, but there are other ways you can maximise the financial potential of your investment property. While adding attractive new features to your location can open you up to a greater number of tenants with more money to spend, renovations can also reduce maintenance needed on your property, and even increase resale value. ServiceSeeking.com.au's Renovation Consumer Price Index indicates that an average kitchen renovation for example will cost between $14,000 and $18,000, but that expenditure and more can come back to you if and when you decide to sell.
There's a lot you can do to improve the financial returns from your investment property, and various services offered by experts that you can tap into. Why not take this holiday season to research and discuss your investment options, and make a fresh start next year?