If there’s one thing we all want to master, it’s how to build a property investment portfolio that is geared to produce optimal returns and be as hassle-free to manage as possible. And with careful consideration and savvy strategies in place, you’ll be placing yourself in the top echelon of property investors.
Let’s consider the threat of a non-paying tenant. We’ve all heard horror stories and some of you may have had your own experiences, call them valuable life lessons.
So how do you set yourself up to avoid costly tenant mistakes?
Some owners adopt guerrilla tactics, which are generally illegal, like turning off the electricity or in extreme cases removing furniture and locking tenants out. It may work, if you’re lucky, but you could also end up in a legal wrangle, where it is quite likely the tenant will be reinstated by the court. A much better approach would be to follow the old adage ‘prevention is better than cure’.
This starts with the proper screening of tenants. A credit check and proof of previous rental history of being a good paying tenant are essential.
Can your letting agent provide proof of screening and are you able to hold them accountable if things go wrong?
While you may start out trying to do-it-yourself, investors can spend their time more profitably by placing the administration of property investments in the hands of an experienced letting agent. IGrow offer a full rental management and administration service to members, with up to 50% discount on the letting agent fee.
The agent will perform and provide upfront proof of ITC and background checks. In addition, other clauses that can be inserted into the lease agreement could include what actions will be taken should the tenant default on rent payment and an indemnity against any losses the tenant may sustain while occupying the property.
A capable letting agent will use tested methods to ensure the right tenant is selected and take the hassle out of the day-to-day management of your rental, thereby safeguarding your property investments.
How to buy investment property?
It all begins with identifying and buying property investments that provide above average rental income and capital growth yields.
Serious investors look to build a property portfolio through acquiring below market value properties and distressed properties, but should be ever wary of the pitfalls of what seems like a bargain too good to be true.
That’s where IGrow guides its members with access to vetted distressed properties, which will yield the best returns putting investors 5 to 7 years ahead of a traditional property purchase.
The latest interest rate increase will further boost the demand for rental property with affordability still being a big factor hampering many would-be home buyers.
The ins and outs of how to build a property investment portfolio and achieve financial independence through long-term growth are not rocket science, but simply require an educated, committed and disciplined approach.