Two things to consider when building a portfolio
Approaching the property market as a potential investment buyer can be a daunting experience, especially if it's your first purchase. After all, there are a lot of different things to consider when compared to purchasing for your own residential purposes. For one, you're looking at real estate as a commodity rather than a home, which requires a more analytical approach to the process.
For an investment purchase, the need for professional advice can be even more pressing than if you were choosing a new family home. To be better informed about making sure you buy in the right area and at the right time, expert advisors who understand the local market can provide invaluable advice. However, there are a number of important considerations to factor into your property purchase decision to help you get the most out of your investment.
Taking care of your investment should be at the forefront of your mind from the outset. One way to do this is to take out landlord insurance, which will help you protect your properties from one year to the next.
Just like other types of insurance, Landlord insurance covers you financially in the event that something unfortunate and damaging happens to the property. For example, damages caused outside of your control that lead to a significant bill can often be claimed through this insurance.
Most cover is used to protect against things like fires, stormy weather, earthquakes, floods and other Acts of God that can compromise your property. Because of the random nature of these events, having the insurance is preferable to taking the risk and realising too late you needed it.
Another aspect of being a landlord that this insurance often covers is if your tenants vacate the property without notice, leaving you out of pocket for a period of time. These insurance policies often reimburse lost rent while the vacancy is being filled, allowing you to continue making mortgage repayments without having to dip into your own pocket.
Discuss the specifics of your policies with an insurance provider. There is no one rule for insurance, so make sure you understand what is and isn't protected or covered under your specific policies.
When it comes to the day to day management of your properties, there are no more suitable professionals than property managers. As a first-time investor, knowing the ropes of the business can be difficult. However, seeking the advice and services of a property manager can help you make your investments as profitable as possible by entrusting the running of them to experienced hands.
From the very beginning, a property manager can help make sure you have the best possible shot at succeeding in real estate investment. For example, they have experience finding quality tenants and should have well established processes for interviewing candidates, creating a shortlist of the best applicants, and making recommendations to help your selection.
A good property manager will shoulder the everyday burden of running an investment property. This means any problems that come up with the tenants, such as repairs or utility bill issues, will be taken care of immediately, giving you more time for other pursuits.
Importantly, property managers are often up-to-date on tenancy law. Having them on hand for advice about negotiating with tenants means that all parties will be treated in accordance with the law, helping to save you from legal fees and headaches that might arise from inexperience.
Image credit: ThinkPanama.com