Despite its comparatively lower rate of returns, real estate investment is still the most preferred investment by many. This is evident in the saying – ‘It’s as safe as houses”. It makes sense, as real estate is a tangible asset, with a long-term track record of generally steady gains – whilst also providing a passive income along the way (if not, a negative gearing benefit). Homeownership (and to a lesser extent, investment property ownership) is part of the ideal Australian way of life.
Usually the focus of any real estate investment is the potential capital growth (increase in value) and yield (rental return), however, real estate investments also need care and protection. It is not enough to just collect rent, landlords have obligations to fulfil. These are to ensure the safety and comfort of the renters. Landlords also need to take care of their properties so that it will continue to bring in income.
Here are five vital checks to accomplish in order to ensure the wellness and integrity of your real estate investments and for investors to get the most out of their investments;
Financial Status – Check your investment property loan. Investor lending rates are constantly changing. Regular review and updates are necessary in order to get the best rates and investment loan deals. Ask a finance broker to check your loans to ensure that you are getting the best deal possible and that you have the most appropriate finance structure for your needs.
Regular Appraisal – While it is given that real estate value is constantly on an upward trend, it is also important to monitor your property’s growth compared to others. If you have been holding properties in one neighbourhood that has already peaked in growth, you might want to sell off and invest elsewhere, in areas with high growth rates. Ask your investment property manager for regular value appraisal or your investment portfolio and real estate market reports of promising areas.
Electrical Safety Check – Ensure the safety of your property by calling in an electrician regularly. Faulty wiring, a defective switch or a busted fuse can cause fire and loss of property. Do not take the risk. A regular electrical check will also keep your rentals compliant and favour your insurance policies. Your property manager should be able to recommend a capable electrician for the job.
Pest Control Check – The worst house pests are not often in plain sight. They are hidden behind walls, under the floors, in dark nooks and in-between small crannies. Termites, rodents, bugs and moulds do not only damage the house, but they are also hazardous to the residents’ health. Ensure the wellness of your renters and property with regular pest control checks.
Building Integrity Check – Building inspections are designed to monitor the structural integrity of your property. Moisture metres and thermal imaging cameras can detect water damages on floors and walls that are not visible to the naked eye. Regular roof checks and clean-up will protect your property from leaks and damage. Timely preventive upkeeps and fixes will save you from expensive repairs in the future.
Make this the year you look under the hood of your investment property to ensure it’s delivering you the best possible return.