Before you invest in property for the first time, there are few basic concepts that you need to understand. Here they are!
Location is Key
You’ve probably heard this plenty of times before, but the location of your rental property is vital. If you’re targeting a young family, you have to think about where a young family might want to live. The first thing to think about is the neighbourhood and the local area. The suburbs are a safe bet when you’re targeting tenants with families. Then you’ll have to consider where the best schools in the area are. Parents will want to live as close as possible to the best school in the area.
Families will also look into the crime rate in the area, and that means you should too. It’s no use being in the suburbs near a good school if the area has a recent history of high crimes rates. Parents will be instantly scared off. You might be able to demand even more money in terms of rent if you’re in an area with up and coming employment opportunities too.
Remember Your Target Tenant
You need to keep your target tenant in mind throughout the buying process. If you lose sight of what it is your tenant needs, you’ll end up with a home that’s not right for them. And then, you’ll have trouble finding a tenant to rent out the property to. This can be a disaster, so don’t underestimate the importance of your future tenants. Without them, you certainly won’t find success as a landlord.
Before you even set out on the property search, you need to decide exactly who you want your tenant to be and then move forwards from there. From that point onwards, your tenant and all their wants and needs should be at the forefront of your mind when you’re making decisions. This is the only way to make sure that you’re focused on tenants rather than your own thoughts and opinions. If you want to find out more about getting the right tenants, visit www.arpi.com.au/why-invest-in-property/faqs.html.
Insurance is Your Back Up
Landlords shouldn’t view insurance as a pesky annoyance that you are obligated to deal with. Landlord insurance is much more than that. It will act as your safety net and could save you from the devastating effects of a disaster in the home. It’s much more important than conventional home insurance because it’s not you looking after the property on a day to day basis, it’s the tenant. You have no control over how they act or behave, so the risk of disaster is much higher.
It’s important that you don’t get an insurance policy that is for ordinary homeowners. You need a specific landlord insurance policy. Yes, these are more expensive, but don’t be tempted to go for the cheaper home insurance option. If you have to claim on the policy, your insurer probably won’t pay out on the policy because you’re not living in the property, you’re renting it out to somebody else.
Investing in property isn’t easy, but the rewards are huge, so give it a try.