Taking a risk to get that investment property for your portfolio is one thing but failing to protect your investment is tantamount to financial suicide, by following a few simple rules you can protect not only your investment but also yourself and your families financial future.
If you’re buying a place 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.
Investment property insurance
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. Getting this wrong is not an option.
When it comes to taking out a mortgage you may wish to consider whether it is appropriate to take out mortgage protection insurance, illness, accident, or total or permanent disability insurance, to cover you if anything goes wrong, particularly when first starting out in property investing and your property has a negative cash flow.
Find a quality property manager
Renting out your investment property as soon as possible once you’ve purchased it, will maximise the return you get with rental income and 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.
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.