Managing Your Australian Property Investment

On an annual basis every Australian property investor should sit down and review their property portfolio. Many people will do this around the end of the tax year – but I prefer to do it over the Christmas / New Year holiday’s when I have more time and also time to make any property investment changes and have them reflect in the current year’s tax return.

Property Investment is not a “hand’s off” form of investment. Even if you employ a property manager for the  day-to-day tenant management – you still need to manage your investment in a more intensive manner than say you would with a superannuation scheme.

Renovations can add value to a property

So on an annual basis what should a property investor be considering? The biggest item I think is maintenance and property upgrades. Particularly if your property investment is a stand-alone house you need to be proactive in budgeting to maintain and improve the property and grounds. I normally have a list of “like to do’s” so that if the tenant vacates during the year I might take the opportunity to upgrade the bathroom or re-paint the lounge while the property is empty – and also probably see a rental increase in return for my efforts. Ask outgoing tenants why they are leaving – often it will be for reasons outside of your control – but if the noisy neighbours or the constant traffic noise drove them out then those are things worth trying to mitigate with improved sound-proofing – even if you can’t fix the problem entirely.

Another area always worth reviewing on an annual basis is your property’s mortgage. Especially with the recent shake out in the banking industry its quite likely that mortgage has been sold to a different institution in the last 18 months or so. You should look at current offers and decide whether you like the loan structure you currently have. All the signs are that Australian home loan rates are on the way up, with another rate rise tipped before Christmas. If you don’t intend to sell or pay down all of the mortgage in the next couple of years locking in historically low fixed-rates for at least part of your mortgage would make a lot of sense.

If your property investments aren’t in your own suburb I like to keep an eye on the local property market. Are there plans for local facilities such as freeways and shopping centres which may impact your property. How are the demographics changing and how will that impact the rentability of your property.

Managing a property investment portfolio is not do it once and forget it exercise. You need to keep an interest in your investment and make proactive decisions – if you don’t its highly unlikely that anyone else is going to do so.

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