Managing costs for your Queensland rental property portfolio
Owning an investment property means you're responsible for all of the costs associated with the home. Whether you own one, three or five investment properties, it's crucial that you understand and prepare for all of the expenses that come from owning a home. From strata fees and council taxes to mortgage interest, each of these costs can add up to a sizeable amount that you need to plan for.
At the same time, you'll want to minimise your holding costs as best you can to ensure you can maximise the return from your property portfolio.
Reduce your holding costs
Limiting the expenses associated with your property can be done in many ways, but it can depend on the type of property you purchase.
For instance, buying an apartment, unit or townhouse generally means you'll have to pay strata fees on a quarterly or annual basis. These fees cover the running of the building, repairs and maintenance to common areas, and utility bills, among other expenses. It can be difficult to reduce this cost once you own the property, so in this case it's best to look for dwellings that possess low strata fees.
Another significant expense that many investors see arise from their properties is for maintenance and repairs. It's crucial to stay on top of repairs as they occur, but if your home was not in the best condition when you bought it then it's likely that maintenance costs will be something you'll have to face for some time. This is when purchasing off the plan properties is a great investment strategy, as all homes are brand new and possess a builder's warranty.
One last tactic to lower your holding costs is to consider the way your rental property is financed. Current mortgage rates are low and attracting, so refinancing to secure a new interest rate could result in you saving money on interest paid on your home.
Increase your rental income
Ask yourself when you last altered the weekly rent you charge for your property. If it has been over 6-12 months, you could be at risk of charging too little. Over recent months, Queensland has seen significant shifts in population, property value growth, vacancy rates and weekly median rents, and if you're not altering your investment strategy to fit, you might not be truly maximising your return.
As demand increases for rental properties in the Queensland area, vacancy rates tighten and rents rise, so compare similar properties to yours in your local area to see if you're charging the right amount for your home.
Consult with a property mentoring expert to determine how you should review your rent and to discuss any changes this might have on your overall investment strategy.