Property investors tend to spend a lot of time researching a suitable property to purchase in order to maximise their returns. However, this is only one aspect of successful real estate investment. The other, often overlooked factor is keeping the property in good condition.
Experienced real estate investors and industry professionals know that spending money to keep a property in good condition results in better overall performance. This include above average rents, a lower vacancy rate and tenants who are more conscientious. Above all, a well maintained property attracts a better resale price.
Remember, in the long term, rental return is typically 2.5-4% pa while capital return can be from 6-9% pa. It is better to look after the property to achieve the capital return.
Poor Maintenance Devalues Property
After purchasing a property, their new owners naturally try to minimise ongoing expenses wherever possible to boost their profits but often shoot themselves in the foot doing so by doing away with important things like professional property management and preventative maintenance.
If a property is not regularly maintained, it’ll take a lot more work and money when maintenance or repairs are eventually undertaken. Worse yet, the value of a property in disrepair is significantly lowered, decreasing both its rental income and resale potential.
A poorly maintained will always attract a poor tenant with the consequential problems of even more maintenance, rent arrears and eviction.
A Well Maintained Property Attracts Tenants
Rental demand in areas like Perth is currently at well below average levels. This means it pays for landlords to spend more to attract quality tenants in a saturated market. There’s no need to spend big on major renovations. Simply maintain what you have to a high standard.
Good prospective tenants viewing a run-down property are less likely to rent it, and without tenants, you’re simply losing money. It’s also important to note that when your property is run down, you can expect similar treatment from tenants. On the other hand, it has been consistently demonstrated that tenants treat well-maintained properties with much more respect.
Good Maintenance is Easier with a Property Manager
It’s easy to forget how difficult it can be to keep a property in top notch repair. Tasks like intense cleaning and renovations can only be performed when the property is vacant but small maintenance jobs can be taken care of when needed.
During inspections, landlords should check drains, gutters, fixtures, fittings, fences, roofing, garden walls for signs of damage and wearing as well as looking all around the property for signs of mould or damp. However it’s a lot to handle for a landlord who is self-managing their property and it’s easy to miss things during inspections if you’re not very experienced.
This is a key benefit of using a property manager. They know exactly what to look for during inspections, can take calls from tenants regarding any needed repairs and immediately arrange for maintenance jobs on your behalf. Property managers have an extensive network of tradespeople and contractors, meaning jobs can be completed quickly and often for less. Remember it is strongly recommended to maintain an “arm’s length” relationship with your tenants otherwise you may become involved with handling numerous issues
Perth Property Management
Unless you have plenty of spare time and are familiar with the legal processes involved in renting out property, it’s crucial to ensure your investment is looked after by a professional property manager. Our team of property managers at Gow Property can ensure your property is well maintained so you can enjoy higher returns and lower long term maintenance costs.