Property investment performance review

Before you can create a strategy to maximize your property investment returns, you need to understand how it’s currently performing. Are you generating the right rental income, are you claiming all the right tax deductions, what’s the condition of your property, is there an opportunity to improve rental yield through renovations and have you protected your asset?

Here are 5 ways to help you review your property’s current performance, to ensure the foundations are in place to create a high performing strategy.

Are you charging the right rent?

Are you getting the right rent? This is fundamental to the success of your investment and it’s important to review this each year.

Your property manager will provide you with the best indication of what your rental income should be and also advise you on when you should be increasing the rent and by how much. Remember, you want to make sure that the rent you are asking for is competitive in the market so that you attract good tenants while also getting a strong rental return.

It’s also important to do your own research of the market, to get an understanding of how much similar properties are renting for in your area. When looking at comparable properties look for the same suburb, the same sized house/unit in a similar condition with similar amenities and land size. If you find you’re under charging talk to your property manager to see what they think as they live and breathe the local market and perhaps look to increase your rent or look to adjust it once the current lease has ended.

What is the condition of your investment?

Not surprisingly the condition of your investment can have a big impact on the quality of the tenants you attract, how much rent you can charge and whether your tenants are keen to resign the lease.

Before knocking down any walls, consider what potential tenants are looking for and what is in demand in your local area. For example, if you’re targeting students, perhaps creating a study area would be appealing with some additional built in storage. If you’re targeting family renters, perhaps consider small renovations that increase the overall functionality of the property.

Updating old appliances such as dishwashers, installing air conditioning units, fresh blinds and curtains can all add to the appeal of the property. We cover this off in more detail in the next chapter.

Investment Loan review

The lending market is highly competitive and new products and packages are constantly being released. Talk to your home loan consultant to see if you can reduce the interest or fees you are paying. Compare this to competitive home loan rates and see if they are better and ask your lender if they can at least match the interest rate of the other lenders. If they can’t perhaps consider moving your business. But keep in mind any loan switching and set up fees as these can be quite hefty.

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Are you claiming all your expenses?

A key bonus of owning an investment is the ability to claim your expenses, so making sure you’re claiming all of them should a be a priority for both you and your accountant.

Basic information to provide to your accountant

Your accountant requires some basic information such as the address, the number of days during the tax year that the property was available for rent, and how many days it was rented, plus a summary of anything you’ve sold or bought for the property through the year. You’ll also need to provide a comprehensive list of all the expenses related to the property and the income you’ve earned from the property over the year.

Are you insured?

Insurance on rental property’s goes beyond insuring the building against fire or natural disaster. Landlord insurance is an important part of helping protect your investment portfolio. If you don’t have this already, it is definitely worth exploring.

Tips On How To Research The Real Estate Market

Whether you are looking to buy a new home or your next investment property, doing your research is critical, but knowing where to start can be tricky. So here are resources available at your fingertips and others that you can explore on foot to give you the best chance of success.

Reliable market data sources

There are many resources you can tap into to access market data for different regions across Australia. Sources such as CoreLogic RP Data, APM Price Finder, realestate.com.au or Residex will help you understand different property markets across each state and territory. Additionally, most government websites provide community profiles that share information about council plans, development projects or building regulations that can help you understand the supply and demand of the area as well as offering data to refine your search.

From a local perspective, your local real estate office can provide you with an in-depth local market report detailing the strongest growth areas, most traded and fastest selling areas, the top-performing local suburbs and a snapshot of houses and unit sales, median sale price, rental yield, days on market and more. Understanding the local market is very important, so make sure you contact your local real estate office – they live and breathe real estate in your local area and are a great source of valuable local market data.

The traditional research methods above are very important, but there are other clever alternative tactics that could really kick-start your property hunt.

Talk to the locals

A good idea to really get the feel of a suburb and street is to find a few locals and chat to them.

If you’re looking at buying a house, wander the street and see if anyone is out cleaning the car or watering the garden. Ask them what the area is like, how long they have lived there, what they like about the neighbourhood, and what they don’t. For example, what is the noise like during the day and night, but also any other questions you may have? You may even be able to find out why the seller is moving and if any developments might impact the value of properties in the immediate area.

If you’re looking at buying an apartment, consider knocking on a few doors on either side of it and ask similar questions to your potential neighbours. If that seems a bit scary, visit the nearest café and ask them what the area is like – they are often a great source of local gossip and community knowledge.

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Infrastructure and Development

Major council developments and infrastructure projects may seem like a good thing at first glance. Still, it is essential to determine whether this infrastructure boom is a result of planned growth in the area, or whether the growth has already happened, and the infrastructure is just catching up.

The local council is responsible for planning and development, including zoning and re-zoning, so they are a great source of information. So head up to the council and see what you can find out.

Property listings

Given the majority of properties are promoted online, this is a good place to research the market. Head to realestate.com.au, domain.com.au or ljhooker.com.au, and review the current listings and properties recently sold in the suburbs or areas you are interested in. This information will give you a feel for the local market, an idea of the number of properties fitting your needs, as well as the average price they are selling for.

Speak to a real estate expert

Your local real estate agents live and breathe real estate in your area and are a great source of insider knowledge – much of which you wouldn’t discover alone, so make sure you contact them and ask about the local market.

Remember, buying a property isn’t that complicated. However, it does take a bit of time to do your research. By thinking outside the box, you can find information that others can’t or don’t see. This way, you will put yourself ahead of the pack every time, and closer to finding your first home, dream home or investment sooner.