5 essential steps for investment property owners

Many people in Australia choose to purchase a residential property to create wealth over the long term. Whether it's through a simple mortgage refinance or using self managed super funds, the option is there for many and is easily accessible.

However, when you become the owner of an investment property, it's likely you'll want to take care of it as best you can to ensure it stays in a great condition. Not only can this help your property stay tenanted for longer but it can help keep the resale value high too, should you decide to sell it in the future.

To make sure your investment property venture is a successful one, here are five tips to keep in mind.

Do your due diligence

Regardless if you are buying an investment property or a home to live in with your family, performing your due diligence is paramount.

Buying real estate means you will take on a significantly valuable asset - and the finance to go along with it - so you need to ensure your purchase isn't a lemon!

Research the local market to determine whether you're getting a good deal and make sure you get an independent valuation for homes you're serious about buying. Professional inspections will also inform you of any potential issues with the property, such as structural problems and matters you might not have the knowledge to pick up on.

Select a property to suit your goals

You'll also need to select a property that will help you reach your goals. If you're looking to hold onto a property for significant amount of time while it gains value, then you might want to buy into an area with consistent level of capital growth.

On the other hand, if you're looking for a faster supply of cashflow without holding onto a property for long, then it might be best to search for a home in areas with a thriving rental market and high median rents.

Whichever strategy you choose comes down to a number of factors, including your personal taste and financial circumstances.

Stay on top of maintenance

Regardless of how sparkling a person's references are, maintenance issues can occur with any tenancy. It might be a broken window, an appliance on its last legs or a crack in the hot water cylinder.

Taking care of these issues as they arise will allow you to keep your tenants happy, while also ensuring your investment stays in a good condition. Otherwise, you might find maintenance issues become more problematic and worsen over time.

Hire a property manager

It can be a difficult task to stay on top of all the responsibilities that come with owning a rental property.

Finding tenants, performing regular inspections, fixing up broken appliances and managing day-to-day expenses can take up a lot of time - especially when you possess multiple properties in your investment portfolio.

A property manager can be of invaluable help to ensure your property is tenanted, taken care of and the occupants are kept happy.

Not only this, but investors can also claim property management fees as a tax deductible expense, giving more reason to use these services.

Keep an eye on the bank account

As the owner of a property, you'll need to be in charge of all the financial aspects. Make sure your tenants are paying their rent in full and on time so you can keep up with mortgage repayments. If you have any issues with this, you can take it up with tenancy tribunal or your property manager.

You'll also need to stay on top of financial commitments associated with your property. This includes costs such as council taxes, rates, insurance, utilities (if you pay for your tenant's usage) and maintenance.

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