How to be an effective investment property owner
For a lot of us, owning one or more investment properties is a great way to top off our annual salary and set us on the path to a comfortable, affluent retirement. Reaching a personal financial level where you are able to buy not only your own home but also a portfolio of extra properties to generate income is not always an easy feat, but something more and more Australians are involving themselves in every year.
You might need to consider what you can do as a property owner to retain people for longer terms.
Achieving ownership of investment property isn't the end of the story however – with each additional home you own comes another set of potential issues you have to deal with, many of which will be ongoing throughout your period of ownership. While employing a property manager can ease much of the day-to-day burden of renting out your investments, some of the more significant issues will need to be addressed by you, the owner.
One of the most regularly occurring challenges you'll face as an investment property owner will come from finding tenants. Addressing the regular turnover of tenants is something your property manager is well-equipped to deal with, but if it's happening too frequently you might need to consider what you can do as a property owner to retain people for longer terms.
CoreLogic RP Data figures released in October 2015 show that Sydney, Melbourne and Brisbane are all experiencing slowing rental increases, due to new housing supply and easing population growth, so what can you do to improve your reputation as a landlord, and ensure your rental property stands out from the pack?
Be a flexible landlord
While it's perfectly within your rights as a landlord to take measures to protect your investment, attracting people to your rental property always presents a challenge. Right from the advertising stage, if you come across as too militant in your rules and regulations, potential tenants are likely to be put off by your strictness.
Looking for ways to show you are willing to negotiate on certain issues is a great way to bring greater interest to your house for rent. Think about things like pets – many rental listings will specifically state no pets allowed, however Australian Bureau of Statistics figures have found that three in every five Australian households have at least one pet.
Obviously not every pet-owning house hunter is going to be an ideal tenant – there's a huge difference between one old age pensioner and her 16 year-old cat, and a young family with nine Great Danes – but there's no harm in at least leaving yourself open to the discussion. Whether you make the final decision yourself or leave it in the hands of your property manager, making these kinds of allowances for tenants is always appreciated.
To build a good reputation as a rental homeowner, make sure you find a property manager who will respond promptly if a tenant raises an issue.
Be a responsive landlord
While renting a home is considered by many to be a more affordable alternative to home ownership, the truth is that in this day and age it can still be the biggest single regular expenditure anyone has. In Australia's capital cities it can be even more challenging, with Domain finding that in the three months to June 2015, median house rents in Sydney had jumped to an eye-watering all-time high of $530 per week. As you can see, being an investment property owner can be lucrative, but for that amount of money your tenants will be expecting reliable, prompt service.
When you're being paid such a high amount week-in, week-out, you need to be on top of any reasonable requests from those who are paying you. To build a good reputation as a rental homeowner, make sure you find a property manager who will respond promptly if a tenant raises an issue, and allow them the responsibility of organising or approving any maintenance requests.
Regular maintenance (that isn't part of the tenant's responsibility) should help to prevent any sudden catastrophes, but when the time comes for larger repairs or similar requests, you're allowed a reasonable period of time to prepare, as long as you ensure your tenants are well informed about any progress. Keeping renters happy can be as simple as building an amiable relationship, and working with them and their personal schedules when it's time for maintenance.
Be a smart landlord
As an investment property owner, you're never going to be prepared for every single issue that will come your way. The best thing you can do is have the right advice, and people on your team to help deal with whatever fate may bring.
By leaving your investments in the hands of an experienced and professional property manager, it's likely that you'll rarely need to interact with tenants yourself, which should set your mind at ease.