There are four key things you can do to accelerate your climb up the property ladder.
Blogger: Carolyn Parrella, executive manager, Terri Scheer Insurance
There are many important factors to consider as a first-time property investor to help you on the path to success.
Investing in property can involve significant financial commitment, and also requires regular dedicated time and effort.
Before making your investment, it is worthwhile seeking the advice of a financial adviser and considering the following top tips that may help you climb the property ladder.
Location, location, location
Investing in an area where there is strong demand for rental accommodation may significantly increase your investment return.
Besides rental return, you may also be looking for capital gain. If possible, try investing in an area that has already seen its downturn and may be ready for, or beginning, its next stage of growth.
New developments or expanding regions can offer great appeal. These options may be attractive to young couples or young families, and may often be associated with new infrastructure and amenities such as schools, parklands and shopping precincts.
Do your research
Regardless of whether you purchase a new or established property, it may be valuable to enlist the services of a professional building inspector.
An authorised inspector will check for signs of termites, salt damp, and other inconspicuous damages which may be costly to repair in the future.
Before purchasing an investment property it may be worthwhile seeking professional realty advice to determine the appropriate rental price.
Setting the rent too high may make it difficult to find a tenant. Meanwhile, setting the rent too low may place you under financial pressure, limit your rental income and potentially attract unsuitable tenants.
Consider a property manager
The experience and knowledge of a professional property manager may significantly outweigh the cost of their services.
Property managers are able to help find suitable tenants as they have experience in screening prospective tenants and have access to a database that lists tenants with a history of defaulting on rental repayments, damaging property and eviction.
As well as finding tenants, property managers are able to ensure all the required procedures take place, such as conducting property inspections, collecting rent and liaising with the tenant on behalf of the landlord.
If you choose to self-manage your property, it may not be realistic for you to be able to attend to maintenance issues promptly. Delayed maintenance may lead to increased repair costs, poor professional relationships with tenants and susceptibility to legal liability claims if the tenant or their guest is injured.
Appropriate insurance cover
A specialised form of landlord insurance may be something to consider, regardless of whether you choose to self-manage or appoint a property manager.
A sound insurance policy should cover landlords for both malicious and accidental damage, their legal liability and the loss of rental income.
A standard building and contents insurance policy generally won’t cover landlords for these risks.
Check your insurance policy and seek professional advice to ensure you have the appropriate coverage.