Investing in property is an exciting endeavor, but it can also be daunting. And, if you’re planning to lease that investment property, you will run into several other challenges.
As with all major decisions, you should ask yourself important questions.
After nearly two decades of experience in property investment and management, I’ve found these five questions are crucial to guide investors towards the result best for you and your investment goals.
Is the property up to standard?
Up to standard can mean several things, such as safety regulations or your own specifications for what makes a property a home. Take a look around your property and take note of what you have and what is missing.
Does it have a car park and ample storage? Do you need to install air conditioning? Are smoke alarms working? Do carpets need replacement? Is there any leaky plumbing that needs fixing?
Has your house or unit been checked professionally for any defects? This is also a good time to schedule pest inspections.
What is happening in the local area?
The lifestyle of the suburb where your potential rental property is located can either impact the property negatively or positively.
Observe the features in the area that are key to attracting quality tenants. These include access to transport options, parks, schools, and proximity to the CBD.
Speak to a property manager who can catch you up on the latest local demographics and statistics in the area.
With a better understanding of your rental property’s neighborhood, you will know what’s in demand and set yourself up for higher rental returns.
Do I have insurance?
It will seem like an extra cost, but landlord insurance can cover all sorts of issues.
Landlord insurance policies take into consideration the risks you face as a property owner and investor and not necessarily as a resident.
Landlord insurance also covers the property owner for tenant-related risks that are not covered by home insurance or body corporate/strata fees.
Typically, a landlord insurance policy will cover:
- Theft or burglary by tenants, their guests or other burglars
- Malicious damage or vandalism by tenants or their guests
- Loss of rent due to tenant default or breaking of the lease
- Legal expenses required to evict a tenant
- Damage caused by disasters (i.e., floods, storms, fires)
Who is my target market?
It’s essential you identify your potential tenants and know what they would be looking for in a rental property.
Once you identify your target market, you can focus on what their wants needs, and expectations are as tenants.
If you’re looking at a property close to a university, consider multiple occupancy homes near transport and amenities.
Meanwhile, if you’re going for the family market, look for a large home with a garden and spacious communal area.
What are my responsibilities?
Some of a landlord’s responsibilities include rent increases, safety and security, repairs and access to the property.
It’s also important to stay updated on state rules and regulations.
You want to keep your investment property safe and profitable while ensuring your tenants are happy. Hiring a property manager to oversee the responsibilities can save you plenty of time and stress.
– Lauren Robinson