You’ve got your first investment property, great! What’s next?

You’ve got your first investment property, great! What’s next?

Read time: 4 minutes, 39 seconds.

So, you’ve taken the leap and gotten your first investment property under your belt. I applaud you! Everyone who invests in real estate feels a sense of achievement after they make their first purchase. But, when it comes to your investment, don’t stop there. There are still some things that you need to take care of before you can start to sit back, relax, and enjoy the benefits.

If you’re new to the industry, it can sometimes feel overwhelming or confusing. You might have already thought of things like pre-foreclosures and short sales from banks as the avenue to the next one. At this point, though, you need to make sure that everything is up to scratch before hitting the market with this new asset.

Investment properties are the building blocks of wealth. Now that you’re already investing in real estate, you’re on your way to achieving your financial goals. However, buying one property doesn’t mean you’ve accomplished anything yet. So we’re going to talk about what needs to be done to maximise the potential of this investment.

Get insurance

After you’ve purchased your first investment property, it’s time to consider some insurance. There’s mortgage insurance and even flood insurance if your property is in a flood-prone area. 

If you’re renting out a home, you’ll need renters insurance. You can also buy landlords’ insurance or homeowners insurance, which protects the building itself, not just the stuff inside. 

Unless you’ve purchased a property that needs repairs, you likely won’t have to spend much on insurance. But it’s still worth looking into.

“Depending on the value of your property and its risk profile, landlord insurance is not hugely expensive and it’s tax-deductible.”   – Penelope Valentine, Director, Property Alchemy

Get a property manager

Owning an investment property is a big responsibility. So you want to keep costs low and cash flow steady. That means making any necessary repairs or renovations, which, depending on the property, can be a huge undertaking. It’s important to know which repairs are tax-deductible. 9 out of 10 property owners get confused about this. So before you go tearing into any walls, make sure you know exactly what you’re getting into.

When you buy an investment property, you’re buying into a trust, made up of a corporation and one or more individuals. The trust, in turn, owns the property and is responsible for all repairs or renovations, as well as any property taxes.

However, if you buy the property in your own name, you’re responsible for the repairs. Repairs can be expensive, so spending the money upfront can make it easier to sell the property. Just be careful that you don’t spend so much that the property becomes unsellable. The last thing you want is to have a money pit on your hands.

Once you’ve decided whether any repairs are necessary, get an estimate from a reputable contractor and make sure the repairs are within your budget.

Make any necessary repairs or renovations

Inexperienced landlords can fall into bad habits, and it’s hard to break those habits once they’ve formed. That’s why 80% of Australian property owners use property managers. The kicker is, you may not even recognise you’re doing anything wrong.

A good property manager can look out for your interests and help you avoid the pitfalls. MLS Finance has a number of property managers we can introduce you to so you don’t have to find one hoping they’re the one for you.  Below are a few things a property manager can assist you with:

  1. 1. Tenant care

A property manager can save you a lot of time, trouble, and money by screening potential tenants. They can identify risks that you may not be aware of, like a history of evictions or unpaid rent. 

  1. 2. Maintenance

Your property manager will do more than just collect rent. They’ll handle maintenance and repairs, ensuring your property is in top shape. So you want to make sure that you have some money stashed away in case any unexpected expenses arise.

  1. 3. Legalities 

“Those managers that are more helpful are likely to provide a better service to you and your tenant. They’ll minimise headaches and how much time you have to commit to fixing problems.” – David Johnston, Managing Director, propertyplanning.com.au

Now it’s time to make some decisions because you can’t just sit around. After you purchase your first investment property, there are a lot of items you need to take care of to ensure that the tenant has a pleasant experience. Many investors may forget or overlook these details that could have a significant impact on the long-term value of the asset.

Remember, MLS Finance takes a holistic approach and can assist you in making the entire process an easy one.

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📞 Call: 02 9635 1888

📩 Email: enquiries@mlsfinance.com.au

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