Most people invest in property to build wealth and to have the assurance of a comfortable retirement. And, as far as investments go, investing in property is considered a relatively low-risk investment option. However, it’s ‘low risk’, not ‘risk free’. You need to be aware of the risks so you can mitigate or eliminate them to ensure that your investment provides good returns and sets you up for the future.
Constantly changing legislation
The legislation surrounding rental properties changes regularly and property owners need to stay on top of the changes. In 2021, the legislation around rentals in Victoria had a major overhaul while the NSW legislation was updated in 2020 (and again in 2021 regarding short-term accommodation).
In Victoria, even the terms that refer to the parties involved were changed. Tenants must now be referred to as ‘renters’ and ‘landlords’ as rental providers.
For an investment property owner, these changes can be overwhelming and it can be time-consuming to keep up with current legislation.
That’s why it’s important for any investment property owner to engage a professional property manager who can keep abreast of what’s going on in relation to the rental laws. This saves you time and ensures that you’re doing the right thing as far as your investment property is concerned.
Landlord insurance
Another way that you can minimise risk is to take out a landlord insurance policy. This provides peace of mind for when things go wrong. This type of insurance policy can cover your property for natural events like fires and floods as well as any damage that the property may suffer. The policy should also cover areas such as malicious damage from renters and their guests as well as any theft that may have occurred.
You can minimise the risk of such damage by having a reputable property manager on your side who will vet potential renters thoroughly and conduct regular inspections to ensure that your property is being well taken care of.
Regular maintenance
When you own a residential investment property, you can’t just sit back and enjoy the rental income. Your property will need some maintenance from time to time. Things break down, storms happen, trees fall and fixtures wear out.
As a rental provider, it’s your responsibility to ensure that the rental property is in livable condition and that everything functions as it should. Plus, it’s in your own best interest to ensure that your investment maintains its value and even increases in value over time.
However, how do you know when something needs to be fixed or replaced? Research has shown that one in seven renters are afraid to inform the owner of required property maintenance because they fear that they’ll be evicted, blacklisted or face rent increases.
Luckily, a good property manager is aware of this and has procedures in place to keep on top of maintenance issues. First, the property manager builds rapport with the renters and makes it easy to be contactable. Regular inspections also enable the property manager to speak to the renters and this opens the dialogue in regards to any maintenance issues. Many property managers also have specific forms that they can leave with renters in the event of a problem.
Getting the optimum return on your investment
You are most likely aware that there’s a current rental boom in regional areas right around Australia. This has pushed rental prices up significantly. In addition, the demand for rental properties in regional areas is at an all-time high with many more people looking for a place to live than there are available properties.
If you’ve had the same renter in your property for quite some time, it would be unwise and unrealistic to suddenly ask them for a large increase in rent so that your return is equal to current market values. In our experience, a good tenant who cares for your property and pays the rent on time is worth more than a rental increase that many leave your property untenanted for weeks. So, what do you do? You don’t want to lose good renters but you’d love a higher return.
Your property manager can definitely help you with this. After all, they’ve built the relationship with the occupants of your investment property and will know how best to increase your returns while still keeping your valued renters.
Can we help with your Swan Hill home?
At Ray White, we know the rental market in Swan Hill and we’re highly proficient in looking after your investment property. So, why not give us a call on 03 5032 2507. We’re here to help.
