91% of Landlords don’t have the right strategies and structures!
7 things Champion Landlords do
They learn about real estate investing principles.
They consider their financial situation and make clear targets about their purchase price, expected duration of ownership and return on investment. This means buying for the right reasons, e.g. secure capital growth or tax depreciation.
They buy or build property in a location that will improve their ability to attract a great tenant.
They consider carefully the design and liveability of a property. This reduces vacancy and increases sale value.
They hire the right property management company.
They keep their property manager accountable to avoid unnecessary costs.
They review annually their investment structures (e.g. insurances, mortgages, deductions)
What to do before buying an investment property
Know what you want and can afford
Make a list of:
your preferred areas
your wish list of non-essential features
Carefully assess your financial situation and desired standard of living when deciding how much you can afford to borrow and repay. Also consider the costs of buying a property, including:
legal and conveyancing fees
loan establishment fees
government charges such as stamp duty and the goods and services tax (GST)
building and pest inspection fees
insurance (building and contents)
Know why you are buying an investment property
Follow and understand what cycle the market is in.
Buying is best done when there has been a drop in price followed by prices stabilising or beginning to rise.
In terms of interest rates, property investors are always going to gamble with rates. You can't control them, but you should follow economic forecasts to determine whether a fixed or variable loan is best suited.
A good mortgage broker is an essential contact for this process.
Demand for residential properties
When buying an investment property, it is vital to ensure that the property you purchase will be attractive to potential tenants. This means that you need to purchase in a desirable area that is well located in terms of access to transport, shops, schools and services.
You also need to ensure that you purchase a property of the type and with the features that appeal to the type of tenant that you want to attract.
While it is generally unwise to buy investment properties only for the possible tax deductions, the fact remains that many people are able to enjoy some financial benefits and returns through ownership and the losses made on their investment properties. Of course, it is necessary to consult a professional to understand the deductions and benefits to which you are entitled.
Get informed about the property market
Learn as much as possible about every aspect of the property buying and selling process, and the products and services offered by:
Research the market value of property in your preferred areas by:
searching the internet
Finding an expert for guidance
speaking with agents
reading newspapers for auction results
Do not rush into buying property
Never rush or be pressured into making hasty decisions.
Make sure you are committing to the right property for you.
You will feel more confident about your investment if you make an informed decision.
Read property and loan contracts before you sign
You may come across different types of contracts, including loan contracts and contracts of sale.
Read and understand the document before you sign.
Ask for any verbal agreement in writing, so you know exactly what you are committing to.
If something is unclear, ask for an explanation. If you are still uncertain, seek independent advice before signing.
Keep a copy of all documents you have signed.
Consider sustainable property features and long term maintenance
There is a 6-star energy efficiency environmental standard for all new homes, and for renovations, additions and relocations of existing homes. Homes that have a relatively low rating may become harder to sell in the years to come.
As a landlord you will need to keep the property well maintained. Pay attention to what parts of the property will need maintenance either in the next few years or on an ongoing basis. Thinking about each items brand and warranties is important at this stage.
Negotiate price and other property matters
Many terms and conditions with sellers, agents, lenders, legal practitioners and conveyancers are negotiable.
Become a Champion Landlord
Our landlord coaches provide FREE advice and assessments for all landlords. A landlord coach can show you what to do and when. They can also access quality wholesale investment properties Australia wide.
They will help ensure that many of the common landlord pitfalls do not exist in your investment strategy.
The biggest challenge for an investor is making the right connections and a landlord coach could be the connection that determines whether you retire early or battle away like the vast majority.