There are a lot of ‘armchair’ property investors who never get beyond just looking at properties and dreaming…

If you want to take the next step, and actually look at buying a property, read on for some tips for new and aspiring landlords (and it will serve as a reminder for long-term landlords too).

These tips are for guidance only, and you should always speak to a financial specialist who can give you advice for your personal financial situation.

A long-term investment

First and foremost, property generally isn’t a ‘get rich quick’ investment. You do have to be in it for several years to reap the benefits.

Like any other forms of investment, the market goes up and down, but the key to good investment is to mitigate the financial risks. These include:

• Put down a sizeable deposit

A bigger deposit gives a solid foundation, and gives you a better chance at surviving poor economic times. It means you’ll be looked more favourable on by lenders, and you’ll less likely to be in negative equity should the market go down.

• Have a contingency fund

There may be times when the property sits empty while you look for new tenants, and unforeseen maintenance issues.

• Don’t stretch yourself

Plan your budget and find a property within that budget. Do not stretch your finances to the limit for ‘the bargain’ property if it’s above your budget, there will be others. Your financial situation may change and you need a buffer, you still want to have some kind of a lifestyle and stretched finances are not good for your mental health.

• Build equity

Paying down the debt on the house your own, or on your investment property means you’ll be building equity. This means in time, you can use this equity to buy another property, or release some to have that holiday you’ve always dreamed of, or perhaps help your children get on the property ladder.

Be flexible

While you may well have decided your strategy, be prepared to change and act on opportunities that come your way.

For instance, you may have your heart set on a location or a particular type of property for your investment, but actually, you can get a larger property with better returns if you look at the next suburb along.

If you already own a property, while you are entitled to raise the rent at intervals, you may need to consider whether raising the rent will mean you’ll lose good tenants who are paying on time and looking after your property. It may be better to keep the rent at the same rate or just a smaller increase instead of an empty property while you look for another tenant.

It’s a business

You’re not a charity and owning a rental property is a business at whatever stage you’re at with property investment. So, like any other business, lose the emotions and document absolutely everything.

Use an agent

Successful property management does take time. There are rules and regulations landlords have to follow, and legislation does change. We’re in the business, so we’re constantly monitoring for changes, and we ensure the properties we manage adhere to the law.

Furthermore, using an agent avoids the potential of losing impartiality. It means you don’t have to deal with any potential challenging or awkward situations, or those weekend calls if there is an emergency situation.

Having been property managers for nearly 50 years, we have plenty of tips to share and know how to maximise rental return to help you get the best from your property.

We’d love you to get in touch to tell you more, and also tell you how our property management services can make your life easier.

Find out more about our property management services, and what we can do for you by ringing 02 4956 9777, or send us an email to mail@newcastlepropertymanagement.com.au. You can also see us at our Cardiff office.

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