Spring clean your investment
Spring is the season of new beginnings and transformations, making it the perfect time to breathe new life into your investment property.
While the traditional spring clean involves dusting off the cobwebs and giving your home a thorough scrubbing, “cleaning up” your investment property is a little less about physical labour, and more about reassessment – it’s about ensuring your investment property is working for you.
Like anything, your investment portfolio, including your property, needs regular review to make sure it aligns with your financial needs and is yielding the best return possible.
Here’s our top six tips to “spring clean” your investment property:
- Review your financial goals
A lot can change in 12 months, particularly when it comes to your personal wealth and the local property market. You may have purchased your investment property during an economic down-turn and rented it accordingly, or you may have decided to retire, to travel or simply to shift your original financial goals. Additionally, major life changes like starting a new job or having a baby can also change your personal financial situation and have you re-thinking your investment property. Spring is the season for a solid review of your finances, including looking at how your investment property fits into your current position.
2. Evaluate your investment property
Post-tax time, many investment property owners have all the information at-hand to adequately evaluate their investment property. It’s important to look at the cost of expenses, outgoings and profit after tax, particularly in comparison to previous years. Consider the life of your investment property, its current condition, and how it stands up against other similar properties in-the-market. Is it going to require serious work in the coming years? Is there still a demand for properties of its kind? Take time to really think about the property, your plans for it and if it’s still a viable investment.
3. Examine the market
Just like fashion, the property market is ever-changing. Over the past few years, particularly during the pandemic, low interest rates and hybrid work drove up property prices in Mudgee, with people keen to swap their city life for a country retreat. Fast forward to 2022, and the market is softening, courtesy of soaring interest rates and costs of living. Investment property owners need to keep up with changes in their local market, particularly around average rents, demand for rentals, and features that will yield higher rent (e.g. pool, acreage, ducted air condition) Having insights into the local market ensures you are charging the right rent for your property and positioning it to appeal to the greatest number of suitable tenants. Additionally, knowing what features renters are willing to pay more for can help steer any future property investment plans that could potentially increase rental return.
4. Assess your agent
The ultimate question for any property investor to consider: “is my property manager working for me?” In today’s market, property managers are not simply rent collectors – they are integral to the success of your investment. This means souring a highly trained, experienced and professional person to manage your property is critical. During your annual property portfolio spring clean, it’s important to consider your relationship with your property manager, particularly over the past 12 months, and if they’ve gone above and beyond for your investment. A highly effective property manager will be a good communicator – they’ll deal with any issues quickly and effectively, and keep you updated about everything to do with the property, including payments and maintenance issues. They’ll also ensure the property is regularly inspected and you’re provided with detailed reports of the property’s condition. If your property manager isn’t delivering, or if you’re frustrated with the agency you originally entrusted your property to, it might be time for a change.
5. Do a thorough maintenance and compliance check
Spring is a good time to address any maintenance issues that have arisen, and to do some preventative work ahead of the summer. Being proactive when it comes to maintenance instills a level of trust with your tenants, which can translate into them taking better care of the home. We recommend:
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- Cleaning gutters & removing leaves to prevent long-term water damage, and prepare for the potential fire season
- Checking the roof for any damage
- Changing smoke detector batteries
- Ensuring all door and window locks are in order
- Conducting an annual air conditioning/heater inspection
- Giving the garden a thorough tidy-up, including lawn maintenance, refreshing any flower beds and pruning.
- If your property has a pool, check the fence and gate, clean the filter and check the pH levels.
6. Look at what’s to come
Nobody can accurately predict the future, but it’s important to try and think ahead when it comes to your investment property. Consider the current market conditions and what that might look like in the future. If rents have increased in your area, it might be time for a rent review. Additionally, think about your tenants and their longevity. If you’re keen to keep a good tenant, it’s worth asking them to re-sign their lease early and get them locked in for another long-term period. If you think they’re readying to move on, start to put the wheels in motion to find new tenants – organisation will help to limit the length of time the property is vacant or on-the-market, resulting in more money in your pocket.
Have you conducted your annual investment property spring clean and decided it’s time for change? Looking to start your property management journey?
Signature Properties Mudgee is Mudgee’s premier property investment specialist. Owner and director Edwina Smith is a highly experienced and professional agent, who prides herself on delivering for her clients. If you’re looking for a new agency to manage your property, get in touch – we’d love to bring our unique signature to your investment.
