Private investors are always looking for the safest investment, one with the potential to bring healthy returns, and with the current state of the economy here in Australia, rental property is a very attractive proposition. In this article, we break down this investment sector to help you gain a clearer, deeper understanding.
Real estate acquisition
Of course, the first step is to buy a property, and with the best real estate agent in Melbourne in your team, you will soon find the ideal property. A rundown property would be ideal, and you can work with a local builder to renovate to a high standard; of course, location is critical; ideally, you want a house near the commercial centre of Sydney or Melbourne, offering a short commute. Targeting professional people is preferable, as there is less chance of issues.
Property management
There are property management companies that manage properties for owners; they offer a comprehensive range of services that include the following:
- Property security
- House repairs/maintenance
- Tenancy acquisition & screening
- Receive rent and carry out bank transfers
- End of tenancy cleans
- Garden maintenance/design
- Legal/tenant issues
- Accountancy & bookkeeping
We recommend using one of the leading property management companies to manage your business; they have many clients, so costs are affordable.
Company formation
Everything must be legal and above board; the Australian government offers a lot of support for startups, and we advise you to create a business plan, which covers every aspect of the business, from marketing to taxation and everything in between. Register for your ABN and hire a local accountant to work remotely and make sure your books are always compliant. Student accommodation is a good market, as this article outlines.
Legal protection
The more properties you own, the more likely you are to have tenant issues; the government protects tenants, and landlords need access to instant legal advice. This is one of the services a property management company offers, with a 24/7 legal hotline that you can access at any time. In the event that you have to attend a court proceeding due to a conflict with a tenant, you will need legal representation. This is one area where you won’t have to worry, as you have the best legal professionals in the field.
Acquiring finance
Getting mortgages for rental properties is obviously important, and there are free resources online to help you prepare for this stage. You want a loan package that is designed around your needs, with low interest rates. If things work out after the first year, you could acquire a second property, and this would cost you less, thanks to lessons learned with the first acquisition.
Start with some online research
Take a look at a few case studies in Australia that highlight the major risks, along with tips to help you manage things effectively, then set about writing a comprehensive business plan, which you should show to a business guru.
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