As a property investor, there's a lot you need to manage every day. We as your property manager take care of most of the everyday administration of the property, there are a few key things you need to do for your portfolio to be set up for long-term growth. Here are 4 things you need to do to stay focused and avoid financial pitfalls in your portfolio.
Be diligent with maintenance
It may be tempting to hold off on replacing the old oven or dishwasher that continually breaks to save money, but it could turn into a costly problem later. When you purchase an investment property, it is advisable to set up a regular maintenance schedule with your property manager and/or accountant. Having a regular maintenance schedule for your included fixtures and furnishings, routine inspections and exterior property maintenance will keep your property in good condition; We can assist with this forward planning of the maintenance by withholding weekly amounts of your weekly rental disbursement, for example, $10 per week. Keeping your property in good condition is also crucial for attracting quality tenants who pay their rent on time.
Decide between self-managed or professionally managed
Fancy managing your portfolio yourself? When you're making this decision, weigh up how much time and energy you're likely to spend on managing your portfolio and if this is something best left for a professional. Sure, if you have the time in your week self-managing your property may work for you but if this is something you know you won't be diligent about, the property management fees will outweigh problems as a result of pitfalls found whilst self managing your properties.
Focus on your portfolio's individual needs
When the recent mining boom happened in Queensland, some investors entered this market at the height of the boom. Unfortunately, at this point, there was only one-way property prices in these regions were going. When particular regions or cities are growing rapidly, make sure you seek the advice of an experienced professional, conduct your own due diligence reports - analyse and objectively weigh up if the investment will be reflective of your long-term investment goals.
Play the long game
This builds on the last point. When you set out building your portfolio, we all know property is a long-game. Yes, we've seen people make astronomical returns in Melbourne and Sydney in recent years but buying in the hope to flip the property for a profit in a few years could be futile unless you have a specific and tested strategy. Property investing, in general, is something that requires a long-term focus. Make sure you determine your long-term goals with a trusted advisor when you first establishing your portfolio. With a long-term strategy in place from the outset, this will give you something to guide your decision-making for future investments.
Property investing is an excellent vehicle for building long-term wealth. Make sure you're making decisions for the benefit of your individual portfolio and surround yourself with experts who you trust.
Call us at anytime to discuss in depth your property requirements and how we can assist you in building your successful property portfolio.
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We all know the basic premise of value growth in most industries is supply and demand. For the property market, demand is a property investor's best friend. To understand the state of supply and demand across markets in Australia, there are specific indicators to keep an eye on as you research. Here's our list of some of the indicators that you can monitor to get a detailed idea of supply and demand in a market.
Days on market (DOM)
The number of days that a property is on the market indicates how quickly properties are moving. As demand exceeds supply, the DOM will decrease, indicating a potential growth and in-demand suburb.
Discount to the sale price
Monitoring the sold price of properties and comparing it to its listing price will indicate the discount price on each property. As suburbs become more popular, the discount price will decrease.
Auction clearance rates (ACRs)
Auction clearance rates (ACRs) are a good indicator of the popularity of an area. When ACRs are high in an area, it's likely that many bidders are competing to purchase a property in the area. Higher ACRs are common in strong investment markets.
Proportion of renters vs owner-occupiers
The proportion of renters in an area indicates the number of renters in an area compared to the overall population of the area. The higher the proportion of renters, the more landlords you may need to compete with when you list your property for rent.
Vacancy rates will be low in areas that are in high demand for renters. In contrast, vacancy rates can be higher in less popular areas. Keeping track of vacancy rates compared to other factors such as rental prices, location, and demographics, is another good way to identify growth suburbs.
It's important to remember that there's no perfect suburb, but you can find a suburb that closely meets your desired price and growth projections and individual investing goals by taking these indicators into account.
Once you've found a specific market or property to monitor, make sure you're proactive about due diligence and talk to a trusted legal and financial advisor. This will help in identifying and mitigating risks as you change and grow your property portfolio. Remember, everyone has their own individual goals with their property portfolios so don't get distracted by the "next big thing." Instead, stick to your long-term goals and make sure any changes to your portfolio are aligned with these goals.