Investors need to take an interest

INVESTORS who have a ‘set and forget’ approach to the properties they own — causing hassles for tenants — may also be costing themselves money in the long run.

INVESTORS adopting a “set and forget” approach by taking little interest in their investment properties could be costing themselves big.

While investors have flooded to the real estate market in recent years in a bid to get their slice of the property boom, industry experts have warned once a purchase is made this should be the beginning of a financial strategy to make yourself a decent return.

Property investors need to take an interest in their property to ensure they get good rental returns.

Landlord insurer Terri Scheer’s executive manager Carolyn Parrella said all investors who own either a house or unit should take continuous interest in their property to boost their financial benefit.

She said in turn it will keep tenants happy and potentially allow for rental increases and capital growth.

“Landlords who quickly tend to maintenance issues and complete regular upkeep for their tenants are more likely to have the rental agreement renewed,’’ Ms Parrella said.

“By spending money on a fresh coat of paint, rolling out new carpets or a makeover of the garden, landlords may be able to help their property remain attractive on the rental market.”

Metropole Property Strategists chief executive Michael Yardney said all property investors should treat their property like a business and remember that expenses are tax deductible.

Metropole Property Strategists’ chief executive officer Michael Yarndey said investors should carefully choose their property before going through with a purchase.

“You need good people around you, you need a depreciation schedule when you first buy the property so you get good tax deductions and you need a proficient property manager,’’ he said.

“If you are in a strata complex — because more people are trading backyards for balconies so they can live close to the city — I believe you should be part of the owner’s corporation committee.”

Mr Yardney said investors should also ensure their body corporate has a sinking fund set up — that is money set aside for maintenance issues and problems, particularly larger expenses that can hit hard if they come out of the blue.

Sky News Business’s Your Property Empire host Chris Gray said after purchasing the property it could be wise to spend money on it immediately and reap the benefits.

Your Property Empire host Chris Gray said landlords need to spend money on their properties in order to get decent rental returns.

“It may pay to spend money on it straight away and ideally for the next 20 years the only thing you will need to spend money on is a bit of paint or carpet,’’ he said.

“You can set yourself up for success straight away whereas the old school approach would be to not spend a cent on the property and then the tenants are always whingeing that something is breaking and you get hit with $100 call-out fees that end up costing a fortune.”

In recent weeks the heat has been put on property investors with rumblings of a Federal Government crackdown on capital gains tax concessions that if enforced will hit many investors hard.

@sophieelsworth

Originally published as Investors need to take an interest