If you are looking for a way to generate wealth by using your investment portfolio, the rental property sector is an attractive proposition. Real estate is always a solid investment and as one rental guru put it, you borrow to buy and your tenants make the repayments! Of course, there is more to it than that, and in this short article, we outline various aspects of the property rental sector.
Legal matters
As a landlord, you have a certain responsibility to your tenants and sometimes conflicts can arise, therefore, you need access to a legal specialist that knows the tenancy laws inside out. Tenants are usually very well-versed in their rights and should they not receive the right response from the landlord, they often complain to the local state officials.
Building maintenance
This is something you simply can’t afford to overlook; either connect with an established property management company or forge a working alliance with a small builder. All properties are inspected by state officials, so your builder needs to prepare for those inspections; when things go wrong, you need to have access to tradesmen who can carry out prompt repairs. Of course, you need comprehensive property insurance, which can be tailored to suit your business.
Bookkeeping & accounting
Your registered business must keep records and file tax returns much like every business; if you join forces with an established property management company, they have in-house bookkeeping and accounting services for their clients.
Screening tenants
In order to reduce the chances of having a nightmare tenant, you need to screen all tenant applicants; this is a service offered by a property management firm and they also advertise your properties; you won’t have to do anything, they even receive monthly rentals and transfer the funds into your account.
Property acquisition
Ideally, look for a rundown property and have it renovated by your building partner; of course, location is everything; Sydney suburbs have the highest rentals and the further out from the city centre, the cheaper the rental. Corporations typically rent high-end properties for upper management and this is a lucrative market to move into.
Capital
If you are looking for a commercial lender, there are online solutions and they don’t need to review your business plan; some investors liquidate other assets to fund the initial project, then expand after a couple of years. There are groups of investors that come together to fund large projects; Google can help you find the right forums where real estate investors hang out.
To summarise, there are very good returns in this sector; we recommend joining forces with a leading property management company, as they have the know-how and resources to keep your assets in good order. They manage your tenants and keep you informed at all times, taking the headaches away from you, allowing you to focus on other projects.
