Explore homes in app
Maybe you are a first-time investor or have recently acquired a new property but are not sure about the complications of property maintenance.
There are many factors and costs to consider in property maintenance that can put off many new property investors. In this guide, we’ll look at how to manage your property effectively so you can achieve your financial goals and overcome the hurdles of how to manage investment properties in Australia.
Property management in Australia may involve overseeing residential, commercial, and industrial real estate. You can either manage your investment property yourself or use a third-party contractor. The responsibilities of managing a property include:
Whether it is for a house, apartment, off-the-plan property, or commercial investment, considering your responsibilities is essential.
Whilst it reduces costs, managing a rental property can be challenging for investors who work full-time, especially those who own multiple investment properties in their portfolio.
By paying for a third-party property manager, you gain access to an understanding of the various laws and regulations regarding investment properties. These include renewing leases, organising rent increases, dealing with disputes, and issuing breach notices. They’re also generally on call at odd hours to deal with emergencies, giving you peace of mind.
Working with a property manager can be a great option.Liquidity is the ease and speed with which you can gain access to the money you have within an investment.
One disadvantage of real estate investments is the lack of liquidity compared to other types of investments, which can force the investor to think long-term.
One of the risks of investing in property is your investment's vulnerability to damage. As it is a tangible asset, there is the risk that something may damage the property, rental or otherwise, affecting its profitability. These risks include natural disasters, fire, robbery, or vandalism.
Debt gearing is a serious consideration when managing the risks associated with real estate investments. Debt gearing is the difference between the debts owed on a real estate investment and the equity within the investment.
The debt-to-equity ratio is determined by the purchase price and borrowing amount. The more distance you place between what is owed on the property and what it’s worth, the better – this lowers the risks. When securing finance for a property purchase, it is important to consider how an interest rate increase would affect your ability to make mortgage repayments on the property.
Property investment insurance, commonly referred to as landlord insurance, is a specialised type of insurance designed to protect property owners. It offers coverage beyond standard home insurance, accounting for the unique challenges faced by landlords.
Here's what property investment insurance typically covers:
Protection against lost rental income if the property becomes uninhabitable due to an insured event, such as fire or flood, or if a tenant defaults on their rent.
Coverage for accidental or malicious damage to the property, either by tenants, their guests, or due to specific insured events like natural disasters.
Coverage for legal costs that might arise from disputes with tenants, eviction processes, or other property-related legal matters.
Some insurance providers might offer additional coverage options like tax audit coverage (related to the rental income), or coverage for contents that belong to the landlord, especially in furnished properties.
Property investors must understand that standard home insurance might not provide adequate protection for rental activities. Landlord insurance is designed to bridge this gap. However, terms, conditions, and coverages can vary widely among providers. Therefore, property investors should carefully review policies, understand what's covered and what's excluded, and consider their specific needs and risks when choosing property investment insurance.
There are risks, but if done right, the return on investment on an investment property can lead to a diverse portfolio of strong assets. This leads to:
Contact us to find out more about property maintenance and ask our team about investing in off-the-plan properties across Australia.
Share this article
© 2024 Copyright Coposit.
