New to owning an investment property? Here’s what you need to know
There’s often a misconception Australia’s rental market is run by wealthy conglomerates, but did you know the majority of Australian rental properties are owned by individual investors?
Referring to data from the Australian Taxation Office, the Australian Financial Review explains in the 2019-20 financial year there were 2.22 million individual investors, the majority of whom (1.59 million) owned only one rental property.
Colloquially known as ‘mum and dad’ investors, these individuals underpin the country’s rental market and many have purchased an investment property in a bid to secure their financial future and simply get ahead.
If you’re new to this arena and have recently become a rental owner, here’s what you need to know…
Select a good property manager
A good property manager protects your rights and the value of your property.
Their role involves screening and selecting the right occupier, collecting the rent, flagging any maintenance or repairs that need to be undertaken and inspecting the property on a regular basis.
They ensure the rights of all parties in the rental process (both the occupier and the owner) are respected and upheld, while also staying abreast of any relevant rental laws.
Not only do they alleviate the stress of owning a rental property, they can help you mitigate any potential issues which might arise, making a good property manager worth their weight in gold.
Know your rights and responsibilities
Owning a rental property comes with rights and responsibilities, all of which are governed by your relevant state or territory law.
It pays to have a general knowledge of your obligations as an owner, including ensuring the property is safe, that any repairs are carried out to code and by a qualified professional, and that the occupier’s right to peace and privacy is respected.
Stay on top of repairs and maintenance
Regardless of the age of the rental property, repairs and maintenance will be required. As a general rule of thumb, you should budget for this outgoing each financial year, but in reality the cost will vary depending on the work required.
If you stay on top of repairs and maintenance as the owner of the rental property, you protect the value of your asset, retain the appeal of the property and also indicate you value the people who call your investment home.
Secure the right insurance
As one of your most important financial assets, your property should be covered by insurance.
This includes building insurance to cover damage to the property from a natural disaster or accident, public liability insurance to protect you if someone is injured at the property, and what’s known as landlord insurance which can potentially cover damage to the property by rental occupiers or lost rent if the property becomes unlivable.
Many insurance companies bundle these three together, so speak with your preferred insurer to find the right policy for you.
Keep abreast of the financial side
Owning an investment property is a bit like rPunning a business, with incomings and outgoings.
It also has impacts come tax time, including deductions you can claim. As a result it pays to consider the financial side of owning an investment property from the outset, so speak with a tax expert or financial advisor to better understand your obligations.
How we can help
Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.
We manage every property as if it were our own and you can learn more about our property management services here.
Alternatively, if you are looking to rent a property, you can view the properties we currently have available here
