Like a nice vintage car, property investments need to be well looked after in order to maintain their value in the market.
It’s interesting when you think about how devoted ‘rev-heads’ are to their prized, four wheel ‘baby’; polishing ‘her’ to a reflective glean every weekend and making sure everything under the hood is in A1 order.
Now consider how dedicated most investors are to their property portfolios. How much time is spent carefully looking over your assets for any nicks or flaws that might need buffing out?
What about maintaining your ‘rental baby’ with a regular, routine ‘service and tune’ to make ‘her’ more tenantable and maximise your returns?
Given that property is your chosen investment vehicle to a successful and sustainable retirement portfolio, I thought it would be interesting to consider the motoring enthusiast’s philosophy toward his or her ‘investment’.
1. Maintain her to a head turning standard
Keep your property looking good and maintain its curb appeal in order to consistently attract tenant and homebuyer interest. Even if you have no intention of selling right now, at the end of the day your property’s value is underpinned by market demand, so make sure the market likes what it sees.
Consider including garden maintenance in your lease agreement. It could take a lot more time and money to completely re-landscape a trashed front yard than it would to pay for a tax-deductible, regularly scheduled gardening service.
And you could conceivably ask for more weekly rent by including this in your lease agreement.
2. Repair as required
Don’t delay or ignore niggly little repairs. If your current tenants are moving out because you’ve overlooked one too many maintenance requests, it will definitely put prospective tenants off too.
Attending to any reported repairs and encouraging your tenants to tell you about issues as they arise is not only ‘best practice’ as a landlord, it will also keep your investment attracting the maximum possible growth and yields for many years to come.
3. Service regularly
Even if something doesn’t specifically require fixing, it’s doesn’t hurt to have any major appliances inspected every so often by appropriately qualified tradespeople and/or inspectors.
This is particularly the case for things like gas wall heaters and ovens, which could pose a safety risk if not properly maintained.
Remember, prevention is always better (and generally a lot cheaper!) than trying to fix some major ‘bingle’, so think safety first and you might just get on top of any minor issues before they become expensive problems.
4. Don’t hand your keys to just anyone
Be careful about who ‘drives’ your rental property. How your tenants are screened and selected can mean either enjoying sustained, consistent rental returns or ending up as a ‘victim’ story on a current affairs program.
Make sure the property manager you engage has a good track record, with minimal vacancies and a methodology (along with access to relevant screening databases) to adequately assess rental applications.
5. Replace parts as required
Things can get a little old and rusty, so it’s good to think about replacing parts that might be reaching their expiry. Think major appliances, dishwashers, air conditioning units and the like.
Of course refurbishments and updates can also increase your investment vehicle’s value and rental income. Just don’t over capitalise and make sure your improvements are noticeable, cosmetic ones.
6. Keep an up to date logbook
It’s critical that all paperwork pertaining to your investment property is organised, easily accessible and comprehensive.
Cashflow is a key driver that will keep you afloat as an investor, so if you inhibit it with sloppy accounting that in turn, impacts your ability to claim maximum portfolio related tax deductions, you risk hitting a big brick wall.
While I’m not suggesting you have to cut and polish your property investment(s) on the weekends, having that rev-head respect for your ‘money machine’ will see you riding the real estate investment road to glory, instead of the ‘highway to hell’.