Monitoring the state of your investment can be the key to achieving success
Much as you go to the doctor for a general health check up every now and then, it is important to check in on the state of your investment property. From time to time, as the years of wear and tear add up, it can be important to assess the performance and condition of your asset.
Monitoring your property’s health is an important task that is vital to ensure success. If your investment’s health can be maintained, it can go a long way to sustaining a good return for a longer period of time.
By looking at the following, an investor can stay on top of their property and any challenges to its health.
State of the property
It is completely natural for a property, whether investment or otherwise, to experience wear and tear. It is simply a part of property ownership that is unavoidable.
Therefore, it is important to look to conduct regular maintenance to ensure that your property stays in good condition and remains liveable for your tenants. By keeping your property healthy and maintained, the chances that you receive a constantly improving return on investment can be better.
Taking a proactive approach to the maintenance of the systems in your investment property, such as hot water or heating, also can reduce the stress on you; the investor.
Everyone has heard the horror stories of multiple systems failing at once, leaving a tenant high and dry in the middle of winter.
There’s that old saying; when it rains, it pours.
When an investor is proactive in their approach, it entails regular maintenance conducted on these systems that could reduce the likelihood that they will breakdown.
These systems can cost a lot to fix. Therefore, by taking this action you potentially prevent your budget being thrown out the window by unexpected breakdowns (sometimes multiple) that will empty your pockets.
System maintenance is not the only thing that can be done to maintain your investment property.
A fresh coat of paint can help a property drastically by improving upon the aesthetics. The difference a fresh coat of paint can make, in terms of visual appeal, can be very apparent.
It can even work to improve upon the value of your investment.
Doing this also gives you the opportunity to have the walls cleaned and the property in general. The amount of dirt and grime that can accumulate on your walls can be rather surprising. By cleaning them, you can renew the protection for walls against moisture and dirt.
There are many little maintenance tips you can take to ensure that your investment property’s health is on track. By being thorough and regular in your approach, the state of your asset can be maintained with little hardship.
Most savvy investors have a vision for their investment. Those visions are only realised through the constant improvement and upkeep of their properties.
When you take actions to improve an investment property, there are multiple benefits.
Improvements to your property can pave the way for potential rental increases that will allow you a greater return on investment.
Other improvements that can be made to add value are:
Renovate the kitchen
Renovate the bathroom
Fixing or replacing old guttering
Landscaping if applicable
Additional storage for tenants
Ensuring that security is of highest quality
Review your rate
The rental yields you gain through your investment are a vital part of your asset’s health and its success. Using this money, an investor can pay down their home loan and build their equity.
Home loans can be a complex aspect to property investment that you should take your time with and research thoroughly. You should find the loan that suits you best and allows for you to maintain a good return on investment. This can sometimes be done through refinancing. By reviewing your rate, you can potentially save yourself a great deal of money in the long term.
A depreciation schedule
A depreciation schedule is a handy tool when assessing the health of your investment property. It can allow you to take stock of the contents of your asset and better understand the importance of the condition of the property itself.
It is a document that tells your accountant the amount of depreciation that can be claimed on your investment property. In order to have one conducted though, you will need to hire a professional quantity surveyor.
Through a depreciation schedule, an investor can save plenty when tax time rolls around. Whether your investment property is new or established, many common household objects and structures can depreciate in value and be claimed back as a part of your tax.
As property values can change over time, it is important to consider having a rental appraisal conducted periodically. By doing this, you can ensure that the rent that you are charging is in line with its true value on the market.
Conducting a rental appraisal can allow you to monitor your rental expectations and help you realise any goals that you may have set.
There are more benefits to a rental appraisal than gaining an understanding of your property’s worth.
One of the positives of a rental appraisal is that they are usually free. Therefore, they are a risk-free option that every savvy property investor can take advantage of.
A property management specialist will collect and share information, like expected rental yields or data from similar suburbs, that can assist your property portfolio’s development and offer it to you at no cost.
If you are looking to expand your property portfolio, a rental appraisal is an excellent way to begin the process.
Having regular conversations with your property manager about the performance and state of your investment property is an important part of having an investment portfolio.
Through these conversations, an investor can begin to understand the complex processes that occur in property management like tenant selection and putting in place appropriately priced rent. A property manager’s main goal is to ensure that your investment property is as profitable as possible. Through regular, better quality conversations an investor can begin to understand exactly how their property manager is making this happen.
Open and honest communication is vital to maintaining the health of your investment property. Any approach that doesn’t include this on a regular basis may be less likely to achieve a return on investment than an approach that does.
Disclaimer: The information in this publication and the links to further information within it are provided for general information only and should not be taken as constituting professional advice from Little Real Estate. You should not rely on the accuracy of this information and should seek independent legal, financial, taxation or other advice to check how any of this information relates to your unique circumstances. Little Real Estate is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, or from our website.