Investing in a property to rent out is a great way to gather funds for the future. Ideally, your property will increase in value in a high growth area and provide a steady stream of income to help you pay off the property investment loan. However, if it’s your first time getting involved in the investment game, it is likely your first time dealing with the responsibilities of being a landlord. Here are a few pointers to help you achieve a healthy stream of rental yields.
Screen your tenants
You will of course be eager to get people into your property right away so you can start earning money from your investment property. But patience is key here. Run credit checks on your prospective tenants, and ask for two references from previous landlords – make sure they will treat your home right. One group of tenants that you can have a respectful relationship with over a long period of time is much, much better than a constant turnover of tenants that you can’t keep up with and could be a liability.
Don’t be afraid to step back
If you don’t want to get involved in these details, you can always hire a property manager. They’ll handle tenants, maintenance on the property and most other issues that could arise. You can sit back and manage your finances with ease!
Work our your returns
Before you forge ahead and buy a property, you should do your homework – are you going to be able to make your money back? Check what the asking rents are in areas of interest, and compare them to the price of buying a home or unit. Alongside mortgage repayments, how much will you be making back? Don’t forget to investigate reports on the future of the market in your preferred areas – you don’t want to buy a home that has good yields in the short term but runs dry five years later! Remember that you never just buy a home, you buy into the surrounding neighbourhood – factor this into your investment loan planning for best returns.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!