How to juggle more than one investment property
Real estate investing is a popular wealth creation technique for many Australians. But a problem for some people is that one property just simply isn't enough!
Unless the financial goals you've set for yourself are quite low, it's likely a single rental property is not going to give you the results you want.
Just as an example of a big financial goal, research from the Association of Superannuation Funds of Australia shows Aussies will need over $42,000 per year to live a comfortable lifestyle. And that's just for a single person!
You might have made the transition from home owner to property investor years ago, but there's a big difference between owning one property and having a large portfolio. Here are some tips to help you stay on top of it.
Think about the costs
Council taxes, loan repayments, strata fees, maintenance and repairs - these are just some of the costs you'll be responsible for as an investor. And these aren't things that you can ask your tenant to pay for, either.
By meeting with a wealth coach, you can determine a strategy that suits your goals and your type of property. It might be reducing some of your holding costs, being smart with your tax deductions or even using the same handymen across all of your properties to get a loyalty discount.
More properties mean more rents. This requires you to stay on top of how much weekly rent you're charging for your homes. Make a point to review your rents each quarter and especially at the end of each tenancy. If you don't stay savvy, you could be charging an inappropriate amount for your rentals - too much or too little, this can affect you.
A property with rent well below the median may potentially attract more tenants, but you could be pulling in much more if your rent was set correctly. On the other hand, setting your rent too high could make it a lot harder to find tenants.
Do your research into the local market and find homes similar to yours so you can set an appropriate amount.
Get them professionally managed
Have you got a lot of spare time? Probably not. If you've got kids, a job, your own business or any other commitments, it's likely you won't have the time to spend adequately managing your rental properties.
It can become quite damaging to your properties and overall portfolio if you neglect it all. For instance, failure to inspect your homes might leave broken appliances unattended for long periods of time. Whether this makes your tenants unhappy and causes them to leave or damages your home further, this could potentially impact your property value or its flow of rental income.
Although hiring a property manager to look after your properties comes at an expense, it's tax deductible. It'll also leave you with time to spend on other things, whether it's family, work or even enjoying retirement.