Property investment is a proven vehicle for building wealth over the long-term, but financial success takes time and effort - and of course, it depends largely on making the right choice of investment property in the first place.
Here are some tried-and-tested principles that will amplify the chance of real estate success:
Choose a property that will be attractive to tenants
A property is more likely to be profitable if it's one that appeals to a wide range of tenants and which will be in constant demand.
Family-friendly homes with a good number of bathrooms and bedrooms as well as entertainment areas will generally have broader appeal than a two-bedroom, one bathroom home (depending on the area of course). Ideally, it should be clean and pleasant to look at plus the surrounds (garden, pavement, driveway, backyard) need to be neat and well-maintained.
Choose a property that is supported by good infrastructure
The area that your property is in is a key determinant of how financially viable it will be. Remember the golden rule of real estate - location, location, location! The area should be attractive to tenants because of its infrastructure (good access to public transport and major road networks, shopping precincts, schools, medical services, sporting facilities and entertainment options). Buying in a good location is imperative for financial success.
Do thorough research before you buy
Unless you're a real estate expert, it's really worth asking industry professionals for advice on your intended purchase. What's the capital growth rate on the property? What are the rental yields? Researching the market will help you understand which areas are likely to be profitable, if the suburb has consistently recorded growth in property prices, or whether you are being lured by a 'bargain' which may end up being an unwise decision.
Choose quality tenants with long-term leases
Tenant selection is key when it comes to profitability of a property investment. Quality, reliable, long-term tenants who pay their rent in full and on time are like gold - and it's worth spending the time and effort to screen tenants thoroughly to make sure that the people who will be staying in your valuable investment for the long terms and will treat it with respect.
Spruce up your property to create instant equity
Savvy renovations that are quick to do and that don't cost a fortune can significantly improve the profitability of a rental property. A garden makeover, new curtains, a fresh coat of paint, modern light fittings, retiling a bathroom or installing new carpets can make a world of difference, with tenants prepared to pay more for an updated home.
Don't ignore maintenance and repair issues
Proactive maintenance can save significant sums of money down the line. Small repair jobs can quickly escalate into costly projects if they are ignored, so it's really worth attending to issues promptly and looking for proactive ways of keeping your property in excellent condition.
Whilst these measures will help investors ensure the long-term profitability of their rental property, there are day-to-day requirements with respect to property ownership that need to be handled correctly. Employing a professional property manager can be a significant contributor to the performance of the asset as they take responsibility for running the property, collecting rent, securing quality tenants, conducting regular inspections, handling all the legal issues, attending to any maintenance or repair issues and generally protecting the integrity of the property.
Professional property managers such as Time Conti Sheffield understand that investing in property can be very lucrative and they know what a crucial role the property manager plays in building the value of that investment. If you'd like to learn more about property management in Perth, please contact them on 08 9362 5333 or visit www.timeconti.com.au and put their 60 years of real estate experience to the test.