How to create a strong property portfolio
When you begin to venture into real estate investing, it's likely that the return of your portfolio will become one of the biggest thoughts that runs through your mind. Along with this, the amount of time you have tenants living in your property and changes in home loan interest rates will also be of concern.
Market changes can happen, but the best way to ensure your property portfolio stands the test of time is to plan and prepare in advance. Gaining a good level of property education is one way to think ahead, but speaking with a wealth coaching expert on how market fluctuations may affect you is the best solution.
One risk that many landlords may face when investing in real estate is dealing with troubling tenants. Rental properties work by letting strangers living in your investment home, and this can at times bring its own problems. How will you know if they'll pay rent on time? Will they compensate you if there is any damage to the property? Will they break their tenancy?
Getting your property professionally managed from the start is the best way to ensure you can prepare for any problems that arise. A property manager can step in if any issues come about from your tenants and will draw up a legal tenancy agreement to ensure your tenant abides by local law. They're also a very useful asset to have once your tenants move out, as they can assess the property for any potential damage or wear and tear and help find new tenants to move in.
While property managers are there to help you with the day to day dealings with your tenants, it's also wise to think about taking out landlord insurance. While it comes at a cost, landlord insurance can help to cover expenses from damage, rent defaults and loss of rent from natural disasters, depending on the provider.
Interest rate changes
Australia has seen many interest rate changes in the last two years, with the cash rate now at a historical low. As the saying goes, what goes down must come up eventually. While low interest rates have certainly helped people to get their foot in the door to the world of property investment, it's important to plan ahead for any future changes.
Think about refinancing to ensure you're spreading the risk on your mortgage. Split loans that are partially secured to fixed and variable rates can help to offset any losses that might occur.
Stay on top of holding costs
Owning more than one property means a lot of administration work on your behalf. If you don't manage your properties appropriately, you could face missing out on the occasional bill or two if you're not staying on top of all your expenses. Also, depending on whether you're investing in a negatively or positively geared property, there might be certain tax deductions you could be missing out on each financial year.
By hiring an accountant to keep a watchful eye on your finances, you can ensure you're getting the most out of your property and that your ingoings and outgoings are appropriately managed.
Planning ahead for any risks or challenges is always a smart thing to do for any business venture - from starting up your own business to investing in a Queensland rental property. With a solid plan to fall back on, you can have peace of mind knowing you can take whatever the world gives you.