Initially, your property portfolio will need additional attention, the ultimate aim is a yielding income where the cash flow is developed enough to sustain itself.
To fund an investment that frequently loses money, where expenses are more than your income, is not sustainable. Eventually, all investments should pay their way, enabling you to further bring more assets into your balance sheet.
Expanding your property portfolio is appealing, but ensuring it’s sustainable and can take care of itself is the first step. Consider the following to make your investment for sustainable.
Do
- Refurbish or renovate – you compete with other property owners so keep it fresh. If your kitchen and bathroom are 7+ years’ old, it could be time to look at options.
- Check your cost base (annually) – review expenses, especially insurance and interest rates.
- Raise the rent – remember the market decides the price so choose the right time.
- Pay down debt – guaranteed wealth practice.
- Secure and experienced property management service – run your portfolio like a business, not a job.
- Long-term rental with regular increases – keep your tenant with small incremental increases.
- Be unique – e.g. solar stands out from the crowd. Put a lot of research into recurring expenses and this could allow you to charge more.
Don’t
- Furnish – the tenant pool that requires this is small and niche.
- Allow short-term leases – vacancy is a killer.
- Offer by-room rental – looks good on paper, not in reality. Run your portfolio like a business, not a job.
Set but don’t forget; review at least annually to check everything is on track.
How’s your investment looking? For a free assessment or to see how we can help you manage your portfolio, contact our experienced Property Management team today!