Owning an investment property to generate wealth can be a profitable exercise but there are many investors who fail to manage the risks that are involved, leading to financial problems that could easily be avoided if some simple steps to protect the investment were carried out. Whatever reason drives you to want to invest in property, there are a few things you should take into consideration to protect your investment.
Investment property inspections
When purchasing a property to rent to others, basic things must be in working order that you might let slide if you lived there yourself. Always have a full property inspection done by a qualified expert.
Landlord insurance is essential and you should contact a broker if you are unsure about what is included or excluded in the policy. Renting property is a business and some of the features of landlord insurance may not be familiar to you. Getting this wrong is not an option.
Renting out your investment property as soon as possible once you’ve purchased it, will maximise the return you get with rental income and also assist you to pay your mortgage. Doing this through a property manager will be at a cost, but it is the easiest way to go, as they will market the property, reference check tenants for you, and advise you on appropriate rental prices for your area.
By making regular inspections you will be able to quickly establish when any damage to the property has happened or if there are any repairs that need to be seen to immediately, by quickly addressing any maintenance issues you prevent the problem from escalating and you also keep your tenants happy. Inspections are also essential in making sure the terms of the lease agreement are being adhered to and your property is being looked after by your tenant.
An investment property is an excellent way to build wealth, but it should be approached like a business. Have a target, formulate a plan, never underestimate the costs and work closely with your mortgage broker and accountant.