Things you MUST know as an investor
Purchasing an investment property can be daunting. Here are some key things you need to know as a property investor.
Landlords insurance
While landlord’s insurance isn’t compulsory in Tasmania, it is a good idea to take out a policy that covers you for things such as damage caused by water leaks, plumbing issues, and if a tenant deliberately damages your property. Some policies will also cover you for lost rental income if your tenant vacates unexpectedly or stops paying rent.
Consider ongoing costs
You’ve probably worked out your mortgage repayments and secured pre-approval for a loan, but have you factored in the ongoing costs of having an investment property? Make sure you budget for expenses such as land tax, council rates, water bills (where applicable), and strata or owner’s corporation fees for townhouses and apartments. It is also important to consider the replacement cost of heating and air conditioning, hot water cylinder, oven and whitegoods (where applicable).
Staying up to date
Tenant legislation is constantly changing, and with the proportion of renters in the community increasing, there’s a general trend for legislation changes to be more accommodative of tenants. Ensure you are up to date with current legislation or engage a knowledgeable property manager to ensure your property remains compliant and you are not breaching any legislative requirements.
Safety and compliance
Smoke alarm legislation is another area that is constantly changing. Your property manager will keep you updated on these and any other similar changes. However, you should make sure you always have funds set aside for compliance activities, such as upgrading your smoke alarms if required.
Things to consider
Having an investment property is rewarding in many ways, but you need to make sure you’re aware of upfront and ongoing costs and potential risks. Factor in the items above for your current properties and future purchases to proactively manage your expenses, address problems and stay on track with your wealth-building goals.
Ready to start your property journey? Reach out to us in whichever way suits you best and we’ll start your property journey with you.