Challenges for rental property investors are numerous. For the rental property investor seeking to actively grow property wealth to establish a passive income the more carefully they choose and manage their property, the quicker this will be achieved. I’ve listed some of the issues for success, but there are many more.
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Where?
So many investors buy a property close to where they live. Why? There could be a reason for example, if they want to self-manage the investment property or self improve by a reno, or more sensibly perhaps the property is in an area with strong growth drivers with expected high capital and rental growth.
Growth Drivers
Simply, there a number of Growth Drivers which can affect a rental property growth performance. Research will uncover them all, but they would include an area where there is high investment in industry and infrastructure. Low unemployment, new freeway, hospital, school, shopping centre, rail connection are all growth drivers. The more the better, as generally one is not enough.
Location
The old saying there are three points to consider when buying an investment property are still just as good today as when they were when shouted at me some 30 years ago and that is location, location, location.
Self-Manage or Property Manager
I often hear stories of property managers not adequately looking after their clients best interests. In my view the investor owner should be the person that knows what’s going on. Generally, trying to keep up to date with rental and capital growth around your property will greatly assist in your property wealth creation and knowing what your PM should be doing. I have to say, in all the time of owning investment property, only once has a managing agent suggested a rental increase! I will always request a rental increase with each opportunity even if its $5 a week. I have one apartment property I self manage in Sydney. I don’t self manage to save a PM’s management fee. I do it as it fairly easy and to keep in touch and I don’t live too far away. I have however, had calls after 10.00pm advising the power had gone off and another one about 2.00am (went to voice mail!) advising that they, the tenant, had lost their door key…
Advisors
My advisors (now mates) have been instrumental in growing my property wealth. My accountant is now pleased I use our property manager and advisor system, as its tax reporting function is emailed to him, saving him time and me money! I’ve also invited him in to my account and he can see and comment on what I’m up to. As our system also allows users to update their loans, property values and current rental, my mortgage broker can look online to see when there is enough equity available to enable a further investment purchase.
These are a few of the challenges for all investors. However, once the property is organised its very rewarding to manage it well and be excited regarding the property wealth you have personally created by being a proactive property investor.
What will you be doing?
Cheers
Antony
www.MyProp.com.au