In Australia, buying real estate is frequently regarded as one of the finest methods to build wealth. But if you’ve never invested before, it might be hard to know where to begin and what to think about in order to make wise choices. We have provided a thorough explanation of the real estate investing process here.
Whether you are interested in real estate or are already a real estate investor, looking for tips on how to maximise your property investment and set it up for success, you can read further into real estate and about investing in real estate in our blogs section.
It is filled with tested advice from our most knowledgeable property managers to help you get more out of your property investment. If you were looking for a step by step guide, here you can find
Know the costs associated with investing in real estate
This is a type of investment property where the income—typically from rent—exceeds the total cost of ownership. In actuality, each cycle you are receiving more rent than you are spending on costs. Each property in this arrangement pays for itself, gives investors access to additional equity, and gives them the chance to go on to buy additional investments.
What is a property cycle? What does a property cycle mean to me?
Although you are certainly aware of the phrase “property cycle,” you might not fully understand what it means when investing or what variables affect it.
Two opposing forces compete for control of property cycles. Demand or the number of persons trying to buy a property and supply or the number of homes available for sale. Property prices will rise if demand outpaces supply, whether in terms of home sale prices or rent pricing. Prices will decline if additional supply enters the market and outpaces demand. But have you ever thought why distinct marketplaces change over time?
The reason is that the demand for homes and other real estate rises along with our population growth. Property values gradually rise as more people decide to buy and rent homes thanks to the straightforward dynamics of supply and demand.
Smart investors and homeowners hoping to profit from the price increase list their houses for sale at the same time as developers and builders begin building new homes to put on the market. As a result, there are too many homes on the market, which eventually lowers housing prices and lowers rent.
How much does buying a property cost?
While a wisely planned property investment may deliver strong financial returns, it can also be a costly asset to purchase and manage.
Becoming aware of the significant up-front and continuing fees can help you avoid unpleasant surprises. It is also important to discuss with your accountant which of these costs are tax deductible. For instance:
- Purchase expenses
- Purchase of appliances or white goods
- Property upkeep expenses
- Utilities connected
- Establishment costs for loans
- Mortgage protection/insurance
- Insurance for buildings and landlords
- Fees for all property management
- Loan interest that is due
- Condo fees
- Council rates on land taxes
- Conveyancing, stamp duty, and attorney expenses
- Accounting charges
The secret to successful investing is to purchase an investment property that is conveniently situated. Here are some of the main neighbourhood and property characteristics to look for and areas where you may add value.
The significance of comprehending property cycles and how demand plays a crucial role were previously touched upon. The location of an investment property is one of the main factors affecting demand.
Spending time evaluating and choosing the finest location may have a significant impact in the long term since desirable locations are constantly in demand from both tenants and purchasers. We have provided below a list of neighbourhood features that you should consider.
- Nearby public transportation and access to facilities like swimming pools and playgrounds
- Close proximity to amenities for a good lifestyle, such pubs and coffee shops.
- A region that is about to undergo urban regeneration, gentrification, or infrastructural improvement
- Neighbourhood with historical buildings
- Nearby to reputable schools and a region with little crime
- Amenities like highways, medical facilities, and transportation centres are nearby but not immediately next door.
- Neighbourhood areas with mature trees and if the property is within 10 kilometres of a large city
How can I make my real estate investment more profitable?
A key benefit of owning a property investment is the ability to add value. Being able to add value to a home investment is a major advantage. We have listed here some of the budget-friendly recommendations for you to add more value to your property:
- Paint your property walls and add carports
- Decorate with fresh blinds and curtains
- Add a skylight
- Change the light fixtures
- Set up a grill
- Add carpets steam cleaned
- Sand the flooring
- Replace the door knobs and handles
- Install a dishwasher and cooling systems
- Construct built-in wardrobes if possible
How can I find the best tenants and attract them to my property?
Finding and keeping good renters is essential to the success of your venture. You have a better chance of getting paid on time and having the property taken care of if you have the correct renters. These advantages are essential for investors.
Additionally, you will easily see the value of finding and keeping good renters when you calculate the amount of money you will lose if an investment is unoccupied for a week, a fortnight, or a month. The following characteristics are prefered by tenants as we think.
- A suitable location and area
- A top-notch, clean kitchen
- Climate control / heating
- Quality appliances and fixtures
- Quality curtains, shutters, or blinds
- Excellent internet connection
- Amiable to pets
- Longer lease, like one year
- Accessible outdoor space
- Suitable storage choices
What should I consider before renting my home?
Not all landlords are concerned in maximising their investment and increasing rental profits. A large portion of landlords rent out their properties because of job or family obligations.
Instead of being just concerned with maximising their rental return, these landlords are frequently more interested in finding renters who take good care of their property. If you are not a local, it will be too difficult for you to do the below mentioned task all by yourself. While some investors are tempted to manage their own properties, it is frequently a wiser choice to have a local, committed property manager look after your house because:
- They know the price ranges.
- They are aware of the rental market’s general demand and what tenants are seeking for.
- They ensure that every tenant undergoes a comprehensive screening.
- Any concerns, including maintenance ones, will be handled by them.
- They will keep up on shifting local laws and assist in making sure your rent is paid on time.
- They will negotiate any rent changes on your behalf and conduct routine inspections to make sure your property is being taken care of.
Having decent renters who take care of the property and pay their rent on time is essential to a successful venture.
Owning and managing a rental property becomes challenging and time-consuming whenever a landlord runs into a problematic renter. Your knowledgeable partner who looks after your property and renters is a property manager.
An expert property manager may help landlords save a lot of time and money and increase the satisfaction of owning a rental property. We have provided below a list of responsibilities that you should check in a property manager when you choose one.
- Addressing all and many daily tenant requests
- Hosting open houses and renting out your property
- Selecting and vetting renters
- Conducting ongoing reporting processes
- Managing the lease signing procedure, financial records and budgeting
- Coordinating routine inspections to make sure your property is being maintained
- The establishing, altering, and collection of the rent
- Handling complaints, evictions, crises, and other problems
- Understanding local landlord-tenant legislation in detail and looking out for the tenant
What benefits does a property manager offer?
With years of experience in the real estate industry, our personalised and friendly property managers will ensure that you get all the benefits as a landlord. And it is better to keep in mind that property management costs are tax deductible.
As professionals in property management, we will ensure that:
- While they attend to the numerous daily tenant demands, you regain your time.
- Less anxiety since someone else is taking care of your property.
- Your property complies with all applicable laws’ stringent criteria, and they keep track of any modifications.
- You are qualified for more extensive insurance protection.
- Happier tenants and lower vacancy rates.
- Communication and property updates on a regular basis
- Due to a comprehensive screening procedure and reference checks, there are less problematic renters.
- Increase cash flow by regularly collecting rent and using procedures to enforce fines
- Control spending by using proactive issue management
- Streamline tax preparation by carefully managing your budget
- Increase rental income by setting the price at the current local market rate.
As an investor, you want to make sure your rental returns are maximised. The key to ensuring you are maximising your rental returns is to get an annual rental evaluation.
Our Real Alliance Real Estate property managers that will be assigned for you are unquestionably local experts since they handle a lot of comparable homes in your neighbourhood.
When your property manager does a rental evaluation each year for your property, we recommend you to ask them the right questions.
- When should a rental appraisal be performed?
- What rent price should you set in order to remain competitive in your neighbourhood market?
- How do you know what your tenants want?
- How can you make your investment more appealing and valuable?
Are you an experienced real estate investor trying to maximise your investment’s profits in order to meet your longer-term financial objectives?
Then we recommend you to read our manual. Here, we have pointed out how to maximise your profits and get more out of your real estate investment in this article that was written in conjunction with our most seasoned property managers.
appraisal for free
Are you hoping to get the most out of your real estate investment? Consult a local Real Alliance property manager for a free rental evaluation and for professional real estate advice
Maximising profits is surely a crucial objective for many investors, but you might be unclear of how to get there. Read our guide to ensure you have the necessary insight to position your property successfully.
