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The Informed Investor: February 2018 Podcasts

Investing in property in 2018 – Things to watch and things to know: February 6, 2018

While it’s not exactly a case of “new year, new me” for the housing market, that’s not to say there haven’t been some subtle but important shifts- or that more aren’t on the horizon. More than that, a lot of last year’s advice definitely bears repeating for those thinking of heading into the market for the first time.  

So, here are some things to consider if you plan on keeping your New Year’s resolution to expand your property investment portfolio in 2018:

Negative gearing – There are plenty of other reasons to keep an eye on election results, granted, but a change in government could very well mean a change to laws governing negative gearing as well. It’s expected to mean that buying a property in order to rely on negative gearing will be become less viable after the laws are passed. However, it’s also worth remembering that if you do currently negatively gear already, the changes will likely not apply to that property.

Changes in interest rates – While they are incredibly low now, there’s no guarantee they will stay that way. But if interest rates rise and property values fall, the gap between what you owe and what the property is valued at can become an issue. For that reason, it might be worth factoring interest rate rises in when considering your initial deposit on a property.

Where you buy – Personal preference plays a part here- some people have no problem buying far away, others find it easier to stay across things when they are closer to home. Generally speaking however, whether it’s near or far to where you live, make sure you know the market. Things like vacancy rates and planning changes are especially important. Often it pays to have a good property manager backing you up as well.

Get your landlord insurance sorted – An easy thing to overlook if you’re just breaking into the property market, landlord insurance can be essential to protect your rental income in the event your tenant breaks the lease and can no longer pay rent or causes any damages. Costs of insurance can vary depending on property and circumstance but they are a tax deduction under current tax laws.

How to Find Decent Tenants and NSW Window Locks Legislation: February 12, 2018

Reactive Maintenance vs. Proactive Maintenance : February 19, 2018

As much as any landlord would love to believe that their property will always be as pristine as when they first bought it, that nothing will ever go wrong, that it’s just going to sit there like a good little investment and not need to be looked at ever again…

…Sadly, that’s not ever the case.

So, the question then becomes: would you rather deal with problems as they arise, or catch them before they are even problems?

Enter the difference between reactive maintenance and proactive maintenance.

Reactive maintenance (aka. ‘see a problem, fix a problem’)

If you’re not in the habit of regularly checking your property, this is likely the style of maintenance you default to: dealing with problems as they arise or as they are brought to your attention. This is the kind of maintenance that will most likely lead to insurance claims as when an unforeseen incidence occurs, there is more chance of damage. For this reason, it’s always worth knowing what is stated in the lease agreement, so you’re clear what is covered and what isn’t. Was the fridge there when the tenant moved in? It’s probably part of the rental agreement and your responsibility. Did the dishwasher break and cause water damage? You may only be covered for the damage, not the washer itself.

Proactive maintenance (aka. ‘Problems? What problems?’)

Proactive maintenance is all about picking up on problems before they become problems in the first place, foreseeing and anticipating would could go wrong and taking steps to prevent it straight away. It involves regular inspections, good communication and relationship with your tenants and an eye for knowing the things that could trip you up. Fittingly enough, these things are often the ones that literally trip tenants up and cause injury:  stairs, balconies, floorboards and carpets are big ones but don’t forget to check plumbing too. If you’re thinking this is a large investment of time and effort, you’re not entirely off the mark, but it’s worth weighing that against what you could save down the track by catching an issue when it is cheaper and easier to fix.

Regardless of where along the life of an issue you’re thinking of getting insurance involved and making a claim, it’s always beneficial to have as much info at hand as you can: details of the tenants, the lease agreements, what went wrong and whether there was any rent lost are all important for starters

For plenty more advice on maintenance, including a few handy case studies, have a listen to Carolyn Parrella from Terri Scheer, Australia’s leading landlord insurance specialist, joining Steve Price with the player above.

Seasoned Investors Portfolio Management: February 26, 2018

Carolyn Parrella from Terri Scheer, Australia’s leading landlord insurance specialist, joins Chris Kenny to take an informed look at tips and traps for property investors.

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