As a property investor, the ultimate goal is for your property to operate at peak performance so you get the most from your investment. However, as you may have already discovered, this is much easier said than done, with many variables coming together to affect investment performance.
Over time, rental yield, property value and community expectations change and evolve, directly impacting the performance of your investment property. It’s important to understand how these forces interact and how you can harness them to continue to get the most from your investment.
A brand new year provides an opportunity to take stock, make plans and begin anew. Put the odds in your favour by discovering how you can operate your investment property for peak performance in the year ahead. Use these tips to position your property for increased success in 2020 and beyond.
Operating Your Property for Peak Performance
Review Rental Yield & Return on Investment
It’s important to regularly crunch the numbers so you really know how your property is performing. Paying close attention to rental yield provides an instant health check when compared to similar properties in your local market. If your yield is lower than the local average, you could look at increasing rent to match the market and improve the performance of your investment. Likewise, reviewing your ROI will give you insight into possible areas of improvement, putting a spotlight on income, expenses, cash flow and liabilities. Understanding these numbers is one of the keys to achieving peak performance.
Assess the Current Market
When was the last time you assessed the state of the current rental market? Do you know the age demographics of your area? Are you confident you know what renters value and need? To be in a position to charge more for your property, it’s vital you understand the state of the current market and how your property stacks up. Get to know these numbers. Understand what people are looking for, know what they value and ensure your property is presented accordingly. Harness your knowledge to attract more interest from renters, increase cash flow and improve overall performance.
Consider Capital Improvements
Your assessment of the current market may identify opportunities for capital improvements, including renovations, upgrades or extensions. While capital improvements can be costly, they can also supercharge the performance of your investment property. Upgrading bathrooms or kitchens, installing air conditioning or converting a living room into an extra bedroom could deliver major ongoing benefits, allowing you to increase rent, attract more secure tenants and improve the overall value of your property. Consider investing in capital improvements to achieve peak performance in 2020.
Understand Your Long Term Strategy
Do you have a long term strategy for your investment property? Have you thought about where you want to be one year, five years or even ten years from now? It’s important to understand what your end goal is as that will indicate what peak performance will look like to you. Do you only want to hold onto the property for the short term, until the market recovers? Or do you intend using your property to fund your retirement? These goals will require very different strategies and have different measures of success. Having a long term strategy will help guide you and position you to get the most from your property.
Engage Professional Advice
Surround yourself with trusted and knowledgeable people to help your property achieve peak performance in 2020. Engage an experienced property manager to look after the day-to-day operations of your investment, including maintenance, rent collection and administration. Enlist an expert accountant to guide you on the deductions and expenses you can claim to increase your return on investment. Network with trusted real estate agents to keep a finger on the pulse of the market and make the most of emerging trends. Engaging professional advice will pay off in the long and short term.
If you’re looking to operate your property for peak performance in 2020, Vision Property & Finance is here to help. Armed with expert property and financial knowledge, we’ll help you make the most of your investment and maximise your return. For more information, contact our Sydney office on 02 8354 3000 or call 02 4014 1999 to talk to someone in our Newcastle office. You can also contact us here.