Christmas is a time to relax, to be merry, to celebrate the year’s successes and unwind with at least a few days of down time.
But I’ve come to realise over the years that it’s also a great time to take stock of your situation – including where you’ve been, where you are right now and where you want to go.
It’s often when you’re feeling relaxed, refreshed and unburdened that you have some of your best ideas. So why not set aside a little time this silly season to review your property investments and ensure you’re on the right track towards financial freedom?
The following tips may help you along the way:
Investor tip #1: Do the opposite of what everyone else is doing
Typically, Christmas is the time of year when most investors slow down. What does this mean for you as a potential buyer? Less competition and more opportunities to negotiate a strong discount. If you have the energy and the financial appetite to buy property in the near future, now is the time to get really active in your chosen market.
Investor tip #2: Re-evaluate your property manager
After appointing a property manager initially, most property investors simply leave it at that without giving the situation another thought. I’ve known of landlords who have used the same property manager for five or six years – sometimes even longer – without ever questioning whether they were getting the best value and service.
A quick review of your PM situation involves three simple questions: Do they contact you regularly about your property and your tenant, or are you constantly reaching out for updates? Are they proactive about advising you of rental market conditions? And have they demonstrated their expertise to you, either positively or negatively, in the past year? The answers to these questions will help you determine whether to stick with your current agent or start shopping for a more experienced PM.
Investor tip #3: Review your rents
Ideally, you should review your asking rents every 6-12 months. If it’s been a while since your last increase, it wouldn’t hurt to monitor asking rents online to check whether the income you’re receiving is in line with the market.
Investor tip #4: Stagger your rental leases
One thing landlords generally don’t realise is that you don’t have to offer leases in standard 6- or 12-month periods. I have a client whose tenant moved out unexpectedly in November, three months before his lease expired. The landlord quickly found a replacement tenant, but that tenant’s new 12-month lease is due to expire on the 28th November, 2016 – right before real estate activity slows down for the Christmas break. So, she offered him a 10-month lease instead. Now it is due for renewal in September, the busiest month of the year in the property game.
Investor tip #5: Reward your tenants
These are the people who are helping to fund your retirement while also keeping your hard-working asset in good condition. It wouldn’t hurt to send them a bottle of wine or a Christmas hamper to show your appreciation!
Investor tip #6: Check in with your mortgage broker
The mortgage market is changing at a rapid pace and if you haven’t evaluated your loans in the last year or two, there’s a good chance you’re not enjoying the most competitive rates or loan terms – especially in light of recent pressures from APRA. After you check in with your mortgage broker for a financial health check, you may be surprised at what options you have available.
Investor tip #7: Set new goals for the new year
Although January is traditionally the time we set aside for goal planning, December is a great time to get ahead of yourself by contemplating your goals. Whatever you’re aiming to achieve in 2016 – whether it’s making improvements to your wealth, your health, your weight, your career, your properties or your relationships – it pays to set aside an hour or two over the silly season to get started on sorting out your top priorities for the new year.
At the end of the day, investing in property is not a ‘set and forget’ enterprise. To be truly successful and generate lasting profits, you need to be an active player in the game. By doing some of the above, you can relax over the Christmas break, set in the knowledge that you’re well on your way to creating a profitable property portfolio that takes you closer to your wealth creation goals.
Til next time, happy investing!