Property is a fantastic avenue for shrewd investors in Australia. Not only are returns optimistic, but property is a much easier investment concept to grasp than less tangible options such as stocks. It’s simple – property is rented out to tenants at an agreed rate, which forms the landlord’s rental income.
Every week your rental property sits vacant is another week of income lost. To maximise your real estate cash flow, it’s vital your rental property is occupied as soon as possible. It’s also wise to encourage longer-term leases so tenants are not constantly coming and going. Incentive longer stays by allowing tenants to have pets or the freedom to decorate their homes.
Proactivity is really key here, as preparing your property, promoting the vacancy and carrying out viewings can take a lot of time that could be spent earning money.
Failure to pay rent is a massive problem – if your tenant is occupying your property without paying, that means cash flow is stopped and restarting it becomes a lot harder. Chasing up missing rental payments as soon as possible (seven days after rent is unpaid) is vital, and calling in the help of the Residential Tenancy Authority might be necessary if your tenant is unresponsive.
If the tenants continues to be uncooperative, tribunal procedures can tie up your property, halt your cash flow and cost you in legal fees.
It’s tempting to hike the rent up to the highest price so you can to soak up the returns as soon as possible. Don’t make this rookie mistake.
Determining the rent for your investment property requires research into the surrounding market. Your property should match or compete with other nearby rentals. This way, you set a reasonable price for tenants, both ensuring you can fill vacancies and allowing you to generate revenue.
While it’s important to maximise your income, it’s equally vital that you aren’t spending it all on the costs of running your rental.
When tenants request repairs, it’s your duty to see that they are looked after. It can be tempting to tell your tenant to arrange the repair and send you an invoice, but this isn’t the best way to manage your money. Since tenants aren’t paying for the repairs, it’s possible they won’t be paying attention to the rates charged by the maintenance company. Shop around for reliable local businesses who can provide maintenance services at competitive rates and keep their information handy for when tenants inevitably request repairs.
Did you know you can claim tax deductions a large variety of rental income related costs?
Immediately deductible expenses include:
Knowing what you can claim can help you better manage your rental expenses.
It may sound backwards, but paying someone else to manage your property can earn you more money in the long-run. A property manager’s job is to complete all of the above for you. When you work with a Ray White property manager, you gain access to professional skills in filling vacancies, addressing arrears, pricing properties, arranging repairs and, best of all, your fees will be immediately tax deductible. Contact us today to find out more about managing your property.