Being a property owner is the dream of everyone is it not? A universal symbol of growing up and becoming an official adult, well I suppose that’s my interpretation on it. However being a property owner now has a new meaning, where you own a property that someone else lives in, you become a landlord. A very kind hearted and honourable thing to allow someone else to live in your property. However would you allow someone else to live in your home…? Notice the difference…? Your home is where you relax, where you can be yourself free from the judgement of the outside world, and where you can be creative in decorating in whatever form you please. However with a rental property, this is completely different. The key to finding a suitable rental property is all about finding the right balance between the investment potential however also spotting that gem of a property that will be cared and looked after. It may be your house, however it will become your tenant’s home.
What to look for in a rental property?
The first thing to mention when looking for a rental property is to eliminate the famous saying ‘it doesn’t matter, I’m not going to live in it.’ This is a fundamental mistake that is still being made by some of the most experienced landlords. It does matter… whatever it is that you’re talking about. Any issues you have in your own home, believe it or not, can also happen in your rental property, therefore it is important to approach your assessment of potential rental properties as if you were looking for yourself. If you won’t live there, chances are a lot of tenants won’t live there either so forget the property with the gold plated toilet in the kitchen!
If there’s an area in mind you’re thinking of investing in, keep an eye on the sales market which will give you an idea of expected demand. This demand often overflows into the rental market.
Ensure you have thoroughly looked through the property, ideally with someone with more expertise. Get on the phone to your builder friend and ask their opinion. The last thing you want to do after investing in a property is hear that you have to pay out more money to fix any issues.
Remember, a cheap property does not always mean a good investment. If a property is sticking on the market there may be a good reason for this. It could be an underlying structural issue, some neighbouring development about to commence, or because there is simply no demand for this type of property in this type of area.
Extend your budget to associated costs. You can get a unit or apartment for cheaper than a house however the rental incomes are about the same, great, this means a greater return…not exactly. You must always look closely at the costs associated with the property for example strata levies. If you have a big house this will come with higher utility bills, and therefore higher service charges for water. Although you may not have to pay money to a body corporate you would be responsible for 100% of the repairs. If you can’t afford it when it’s vacant then you might want to reconsider having a property with the added expense.
Make sure you always review your investment
You may be one of the lucky landlords who has a fantastic tenant who takes care of the property, always pays rent on time and even goes above and beyond to ensure your garden is well maintained. However, you have to be sure to always review your investment and ensure you are receiving the best market rate for your property and are receiving the best return. At Rentwest, we carry out a rental review every 6 months to ensure you are achieving the best possible return at the time of the market. We also ensure our staff are continuously trained on all things property to be able to advise you at every stage of your investment. In addition to this we also work very closely (I mean same office close) with a finance company, custom financial solutions who are always on hand to advise owners when the time comes for refinancing.
So what now?
This parts easy, call us. We have over 25 years’ experience in assisting new and existing landlords in the entire Perth region in finding the best rental properties and advising them on how to maximise investment returns as well as sourcing secure tenants quicker than the Perth average!