When was the last time you’ve taken a good hard look at the leases you have in place across your portfolio?
It’s easy to have a set and forget mindset when it comes to investing. It doesn’t mean that you don’t speak to your property manager or that you ignore your tax returns… a set and forget mentality with property investing points to a portfolio where you have taken the time initially to do the research and set up the experts to take care of everything. Because your portfolio is ticking along nicely overall you do not pay it much ongoing attention.
In some instances, and specially within the real estate industry, it is common for a property manager (that you had extensively researched and interviewed) to move on. If you are lucky there will be an email or a letter outlining the change of property manager, although often that is not the case.
Being a savvy investor
A savvy investor will be actively involved with their investment properties. Now, this doesn’t mean you have to invest a lot of time. Be smart and have automatic alerts that come into your inbox to keep abreast of what is happening in the areas you invest in.
Another great practice with managing your portfolio is to conduct yearly portfolio reviews. Review the performance of each property and its position in the portfolio to see whether further actions have to be taken. One such action could be to review the rent received from each property. The property manager may say that a $5 rental increase is fair, however you know from the information you collect that the area is experiencing a tightening rental market and even though it may seem “unfair” a $20 rental increase is potentially possible. The more informed you are the better you can drive your portfolio and maximise your returns. It pays to keep looking at what else is available.
One example I can give around leases is if fall due at the start of a new year. This often occurs when people need to relocate states for new positions for the new year. They want their children to finish the year at their current school so plan the move for the start of the year.
Don’t wait too long
Don’t wait until next year to organise new leases that fall due in the new year. Our mind sometimes plays the trick on us at the end of the year that the new year is next year and you have plenty of time… For leases due early in the year, review the market and get the new leases with the rental increases written up before Christmas to beat the rush in the new year. Whenever a lease falls due, do a quick stock-take on the performance of your property manager;
- Are they pro-active?
- Do they return your calls in a timely manner?
- Are they consistently giving you great service?
A bit of fore-thought will ensure you are not a set and forget investor.
If you like this article, please do leave a comment. If you have any stories of your own to share, or have any questions we would love to hear from you.