B Invested

7 WAYS TO OPTIMISE YOUR PROPERTY PORTFOLIO FOR SUCCESS

Successful investing is not only about purchasing properties below market value with a good upside for growth and neutral to positive cash-flow. Once you have strategized, gotten finance, purchased in-line with your goals and rented out your properties, it is important to nurture your portfolio – just as you would nurture a growing child. In order to maximise success, you must optimise your property portfolio. Here are seven things you can do to get the most out of your investments.

1. TAKE CONTROL AND MANAGE YOUR PAPERWORK USING MY PROPERTY TRACKER

Unless you love data entry, chances are that you put off sorting through your property paperwork until tax time. By then, however, the sheer volume of sorting, typing and filing is enough to make anyone feel overwhelmed. On top of this, you’ll only get a clear picture of how well your portfolio is performing once a year. What about the rest of the time? My Property Tracker is a web-based solution to both of these problems. Simply take a photo of each bill as it comes in and send it via the MPT App. A team of Aussie property investors will do the data entry for you. Because data entry stays up-to-date, you will be able to check the performance of your portfolio at any time of the year. It shows you how much your properties are worth, how much rent they are making, the balance of your loan repayments, your net worth and more. With the click of a button, you can generate a summary to give to your accountant at tax time, AND, you can even run a report to give to your broker when you want to borrow more.

2. KEEP YOUR PROPERTIES IN TIP TOP CONDITION

According to Daniel Young, top-gun property investor and co-founder of Binvested, keeping your properties in good, tidy condition means tenants are more likely to stay for the long term. If your properties are in bad repair, it is more likely you will earn less rent and risk prolonged vacancies. This needn’t mean forking out $20,000 for a new bathroom and kitchen. Daniel says, putting in new carpets and adding a fresh coat of paint are relatively cheap ways to spruce-up a property and increase its rental value.

3. MANAGE YOUR PROPERTY MANAGER

Good property managers are few and far between. You may spend weeks finding the right one for your properties, and then, a few months down the track, realise someone else (who is much less competent) has taken over their job. This is exactly what happened to Daniel. He says, a lot of investors leave their property managers to their own devises – but this is a mistake. He recommends speaking to your property manager at least every quarter and checking up on arrears, problems that may be causing vacancies, and any other issues that arise. Check the way they list your properties. Have they used the right wording and photos to attract interest? As an investor, it is your job to manage your property manager.

4. REGULARLY REVIEW RENT

Check rent every 6 months or so, as well as at the end of a lease period, to make sure you are getting market rent for your properties. By checking realestate.com.au or Domain, you may discover market rent is higher than what you thought. If, however, you are struggling to find tenants during a prolonged vacancy, be flexible in the rent you ask. It is better to charge less to begin with (and gradually increase it), than get nothing at all.

5. REGULARLY REVIEW PROPERTY VALUE

Keep an eye on comparable sales so you have a clear idea of the market and how much your properties are worth. If you get them appraised every 6 to 12 months you will have a more up-to-date picture of the amount of equity you can access for further purchases.

6. KNOW WHAT’S HAPPENING WITH STRATA

If you have invested in units, it is advisable to stay on top of strata management. Daniel says he had an experience in the past where it took six months to fix a water leak in a unit block – even though the strata manager knew the repairs were urgent. The excess water from the leak cost owners $10,000. If repairs are needed, make sure a number of quotes have been sought and the most reasonable has been chosen. Check to make sure repairs have been done properly and are not impacting residents in any unforeseen ways. Dodgy repairs = further costs down the track.

7. MINIMISE INTEREST RATES

If you want to stop purchasing and leave your portfolio as it is, it may be worth chasing after a lower interest rate and fixing it for a set term. Not only will this benefit your cash flow, but it will also protect against rising rates and greater repayment costs. Locking in cheaper rates may benefit retirees or those who need to take leave from paid employment.
If, however, you do want to access equity in order to purchase more, locking in cheaper interest rates is not a good idea.

Investing is a business. As an investor, it is your responsibly to take charge and manage the performance of your portfolio. Stay focused on maximising results and take care of your investments – so they will take better care of you.

 

Exit The Matrix