Property Investors: How to maximise your returns
Most property investors play a long game. It’s a golden rule of real estate that retaining ownership of a property for 10 years or more sharply increases the likelihood you will double your money, regardless of the prevailing market conditions when you decide to sell.
Although capital city markets frequently deliver opportunities to generate a tidy capital gain when a property is held for only two, three or five years, investors who buy and hold for 10 years gain an edge in several areas.
The strong capital gain that almost always flows from a well-located property held for the medium to long-term is the major benefit, of course.
But by accessing the services of a professional property manager to handle rent collection and provide up-to-the-minute condition reports, landlords win in other ways too.
For example, objective advice about a property’s condition allows investors to plan future improvements several years in advance. This insider information puts them in the box seat to maximise tax deductions from the financial outlays on their properties.
“A good property manager continually updates the landlord – and not just at the end of the tenancy,”
Landlords who engage an external property manager are also able to conduct repairs and upgrades to their properties more quickly, in addition to keeping tenant vacancy rates to the bare minimum.
Nelson Alexander manages more than 14,000 rental properties for landlords. Its routine inspections of these properties and alert systems for landlords allow investors to achieve optimum levels of forward planning and above-market financial returns.
Tenant selection is another crucial field of expertise provided by Nelson Alexander property managers.
Nelson Alexander’s head of inner-city property management Grant Gifford says the company operates a tenant’s online booking system that greatly assists landlords in finding the right tenant.
“Every prospective tenant who inspects our properties needs to register, so we are constantly building a database of names, phone numbers and email addresses,” he says.
“The registration system collects information about tenant preferences and their budgets. When we put a property up for rent for $1000 a week, our system will match it with prospective tenants who can afford it.
“We can send an email or a text message to a prospective tenant, who may not even be aware of a particular property that’s coming up. But behind the scenes our system has cross-referenced a tenant’s needs and likely budget with the upcoming rental properties.”
Routine property inspections are the heart and soul of good property management. Nelson Alexander inspects each property it manages every six months – a vital service that goes beyond maintaining a distance between the tenant and the landlord. It gives the landlord invaluable information to plan ahead for maintenance issues, such as repainting or the replacement of carpets and curtains.
Mr Gifford says the period between the end of one tenancy and the start of another is the best time to repaint and recarpet or to install a dishwasher.
Work carried out in these changeover times assists landlords to increase rents, as well as to reduce vacancy rates.
“Good real estate agents conduct regular, routine inspections and they will forewarn a landlord during a tenancy that they need to consider upgrading at the end of the lease or tenancy,” Mr Gifford says.
“The end of the tenancy could be one to three years away. With plenty of early warning about any works that may be needed, the landlords we work for are able to budget for the expenditure and plan ahead to make tax deductions.
He says Nelson Alexander property managers strive to keep landlords aware of their property’s condition and the potential upside of making tax–effective improvements.
“A good property manager continually updates the landlord – and not just at the end of the tenancy,” Mr Gifford notes.
If you would like to receive a no-obligation appraisal of the rental demand for your property, please contact a Nelson Alexander office.