Property investing in Sydney has its own ups and downs, but if you’ve started investing a few years ago, you may be feeling great now about your decision. The Australian property market has been increasing, but as property investors, you must be vigilant and watch out for potential drawbacks that may come along the way.
Even if you have a property manager, there are some things a property manager can’t do for you and if you start early, you will reap rewards in the future. Here are the top 10 New Year’s resolutions for property investors:
1. I will get real about my budget.
With an extended period of low interest rates, people tend to be comfortable and think that they will always have extra money on hand. The truth is, no one can be certain about the future so it’s always better to have savings. Track your spending and make a reasonable monthly budget. By recording your expenses, you will see your spending habits and spot any wasteful purchases. Sticking to a budget will help you build up savings for the future.
2. I will watch my portfolio.
If you are a long-term investor, you might be surprised how far your investment has come along and how much is it is now worth. A clear understanding and analysis of your portfolio can help you decide whether you are ready to make another investment or not.
3. I will take my insurance policies seriously.
Many investors fail to read and understand their insurance policies until they need to make a claim. Insurance policies are not all the same. Some policies don’t cover accidental damage, properties leased month-to-month or arson by the tenant. Make sure that your property is properly covered and not under-insured.
4. I will make sure that my interest rate is competitive.
Currently, interest rates are low. A negotiation with your bank will give you some interest discounts, especially if you compare it with a competitor’s offerings.
5. I will regularly check my rent rate against comparable markets.
By doing this, you can find out whether you are charging too little and need to raise your rent. Researching comparable homes in your area will also give you an idea on what needs to be improved in your property. Maybe you need a new air conditioning unit or bathroom renovation.
6. I will ask for a depreciation report.
There are many property investors who are not aware of the advantages of having a depreciation report and keeping it up to date. Depreciation of your property can be claimed against your taxable income every year. This can also relatively improve your cash flow.
7. I will keep track of the performance of my assets and cut losses if needed.
Sometimes, it’s hard to admit that we made the wrong decision. We get attached to our property and find it difficult to let go and sell. We hope that market conditions will fall in our favour in the short term and things will change. Hanging on to a poor investment will rob you of the chance to invest more favourably elsewhere. It is always wise to examine the performance of your investment and cut your losses immediately if needed.
8. I will never stop learning.
There are many great resources out there for property investors and most of them are free! Take advantage of the different property sites on the internet along with their free newsletters, forums and blogs.
9. I will take advantage of low interest rates.
Historically speaking, low interest rates won’t be there for long. Although the Reserve Bank of Australia hasn’t given any clues yet on an upcoming rise on rates, it is better to take advantage of the current situation now than be sorry later.
10. I will be ready and enjoy what 2016 has on offer.
Your mental preparedness and ability to strive even under pressure will keep you going no matter what the market holds in store. Focus on your goals, stay positive, and have a wonderful year ahead!