Keep your Long-Term Tenants.

Long-term tenants = long-term cash.

Now you have tenants in your property how do you keep them happy so that they will become long-term tenants?

The most effective way is by building a good relationship. It costs a lot of money whenever a tenant moves out so it would make sense to retain your tenant for as long as possible. It takes roughly 5-times as much to replace tenants, as it does to keep them, so put some effort into keeping your tenants happy.

Or think of it this way, if you have a tenant in your property for 10 years and they are paying you $2000 per month, that's $240,000 they have paid you! If they haven't paid off the property by themselves, then they have made a very large dent into the mortgage.

When to buy property - for the first time.

Which do you think is harder? Knowing HOW to begin a property portfolio? Or knowing WHEN to begin your portfolio?

I would say the latter, and it's becoming more and more difficult to start. Entering the investment market means you need money and you either get that by saving for a deposit and buying a house as you normally would. Or if you already have a home, leveraging the equity in the property as a deposit. To leverage your own property, then you need to have paid some or all of the original loan, or the property has to have increased in value. 

Both of these options take time, especially if you are waiting for your owner-occupied property to be completely paid off before you begin investing. At which point you may jeopardize your portfolio's full potential.

Do you know how to make money from property?

Everyone starts in the same place when it comes to property. They start from the beginning. They don't wake up one morning with a portfolio of properties that are raking in a very nice passive income. They had to start from square one*. They made mistakes, they worried about each move, they fretted about tenants and maintenance and nest eggs.

They had to learn how to make money in property and once they understood that they then built a strategy, and once they had a strategy they built up their portfolios. So the starting point is HOW to make money in property, and there really are only two ways:

Before you make an offer, ask these questions.

A Buyers Agent is your best friend when it comes to negotiating a price for a property, but if you have decided to do it yourself, there are a few key things to keep in mind.

You have hopefully looked at a lot of properties if you are ready to get to the negotiation table, so you will be well aware of what similar houses are selling for in the same area.

Remember, the key number here is the final sale price, NOT the asking price.

It is fairly common that an agent will list a house 5-10% more than what the vendor will settle for, so keep that in mind when you are heading to the table. This means that the asking price is really just the starting point! The final sale price could be quite a bit different.

So before you barge on through to the negotiating ring, here are a few questions to consider:

The Inspection Short Cut when Buying Property

When buying a property either as an investment or for you to live in, you need to do your due diligence. One of the steps is to get an independent house inspection completed. But before that step, you can have a quick look 'under the hood' to see if it's worth getting an inspection done on the property at all. If the house 'fails' this list, then you need to decide if the price is right to go ahead with the inspection, knowing that there will be a lot of work that needs to be done. But at least you will be fully informed to make that decision.

Hopefully the vendor is understanding about what you are about to undertake, you might need the house for a few hours!

 1 - What's down the drain?

• Replacing plumbing can be a very costly 'adventure'. You want to avoid that if at all possible. If the owners of the property are willing, then you can get a quick idea if there is a back up in the pipes by doing this: - Run a full load of laundry, fill up the bath and sinks and then attempt to drain them all at the same time - along with flushing all the toilets!  What happens? 
• This also allows you to see how the toilets flush? Are they easily clogged? Can they handle lots of toilet paper?
• Don't forget to turn the shower on for awhile and check the pressure, if there is more than one shower in the house, turn them on at the same time.
• This exercise also lets you turn on all the taps to make sure they are all functioning and check to see if the waste disposal is functioning, what about the dishwasher and any other water using appliances? While you're looking at water based appliances, don't forget to check to see the range hood is working and the oven is in good condition, Maybe cook something while you're doing everything else?

2 - Let the fresh air in.

Open all the windows and see if they stick, see if they are all functional.

3 - Turn on the heat.

If there is a fireplace, light a fire, this is a good way to see if the chimney needs some attention, if they draft in the right way or if there are any other unseen problems.

4 - Take a drink

You may know that the water supply to the city is good, but you won't know what the pipes are like until you pour a glass of water or 2 and see what ends up in the glass. Is it just water, or lots of particles? What colour is it? Will you need to put a filtration system in, or can you get away with a couple of filter jugs

5 - Open the electrical breaker panel

If you open up the panel and there are lots of wires that go no where and you have no idea what each of the fuses are for, you might want to reconsider purchasing the property.  On the other hand, if it's all well labelled and clean, then it probably an indicator that the rest of the wiring is pretty good (but do get it checked, don't base your decision on a control panel.)

6 - Turn it on.

Turn on all heating and any air conditioning. Let it run for awhile, play with the temperatures and make sure it's functioning properly.

7 - Look under the hood

• If the property is carpeted, look underneath in several places if possible. A good place is in closets. See if there is mould or mildew under the carpet. This will also allow you to see if it's hardwood or concrete underneath, this may help you decided to pull up the carpet and refinish the floors.
• Make sure you look around too for mildew and mould. You might find signs of dehumidifiers and other 'Damp Rid' products. The homeowners are probably smart enough to get them out of sight, but look for any silica bits that may have fallen out, or indentation in the carpet where a dehumidifier may have sat near a power outlet. Mind you, you do need to take into consideration the climate, if property is in a humid place, dehumidifiers may be par of the course anyway.

8 - Chat to the neighbors

Find out if they know anything about the house, have they seen workmen in their regularly? Have they noticed the owners completing regular maintenance on the property. Does the property get regular visits from animals families moving in each year that you may not have been told about?

So do you have anything to add to the list that you always look for before buying a property? 

How to Create Curb Appeal in your Rental Property

What do you need to do to make your property stand out from the other rentals on the block?

First of all you need to get potential tenants up the driveway. if the outside is looking a little less than appealing then they may not come in at all.

We recently talked about how to present the inside of the property, here is what to consider for the outside.

• If the property has a front fence, make sure it is in good condition - painted and fully functional. Broken boards, a gate that hangs on it's hinges or a fence covered in graffiti is going to put off most people.

• Weed garden beds, it's a simple thing, but it makes the garden visually more appealing. 

• Replant if the gardens are looking tired, suggestions for large areas are: yuccas, grasses or larger varieties of plants depending on size and scale of land, and driveways. But make sure you mix in some color (see below)

• If you are thinking long-term, mix up the planting with both perennials and annuals, this allow you to have some color all year round.  To achieve this, use fewer annuals at the front of the garden bed and then use perennials towards the back. Some flower suggestions are pansies, begonias and petunias.  

• Don't forget walkways - planting along these areas is just as important as the rest of the garden.

• Fresh mulch is a great way to cover up any gaps, to give a crisp fresh look and also reduces maintenance and water consumption.

• Once you have upgraded the gardens make sure you sweep and tidy front and rear yard. Keep on top of this until the new tenants are in place.

• Mow the lawn and keep it neat - this is the equivalent of vacuuming the carpet inside.

• If you have concrete steps, consider painting them, or pressure washing to clean off any old grime. Add a large pot with colourful blooms or deep green rich foliage.

• Pressure wash the house, or repaint if necessary. This is a good opportunity to update the look of the property if the budget allows.

What are your favorite tricks when it comes to keeping your rental properties looking good from the outside?

Finding the Elusive Positively Geared Properties

Image Source

These are the holy grail of investment properties - the properties that put money in your pocket (after expenses) rather than it costing you money.

The trick is finding them, a lot of new investors have trouble coming across them, most likely because they don't know how to look for them.

So lets find them:

Have a strategy and goal - You need to know what you are looking for, otherwise all properties may or may not fall within your search field. What yield are you looking for? What properties tick the boxes?

Don't rule out options - If you are comfortable with some debt and you can manage it well, you could open up more opportunities by investigating debt funded properties. The debt would cover the short-fall.

Am I Throwing Away Money by Renovating an Investment Property?

I guess the answer is, it depends on what you are doing with the property, and what sort of renovations you are talking about. If you are doing it up to sell, then you need to know what sort of returns you are likely to get before starting the renovations. If you are trying to attract tenants, then you need to find out what comparable properties are offering.

But there are some simple 'cheap tricks' to make a property more attractive either way. You don't need to fully renovate the property - you don't need to spend $10,000 on the kitchen -  when all your property needs is a bit of 'cheering up'.  You can't go wrong when you try to make the house feel more like a "home" so consider trying these:

What is the best flooring for your Rental Property?

One of the main expenses when you own rental properties is maintenance. It is important to keep on top of the little things before they become large and expensive things. So anything that you can do to help minimize those maintenance expenses is a good idea. Flooring is one of those areas that by choosing wisely at the outset, can save you a lot of money in the long run.

Worn carpet, chipped tiles, squeaky floorboards, you no doubt have heard all the complaints about flooring. But which source provides durability,i s cost effective, and also gives you with an opportunity to update the look of your property?

It depends on where your property is located. If you have property in Darwin then tile flooring is a great idea, but it's not so warm and friendly if your property is in Canberra -  so what options would work best?