In the last 18 months or so rental returns have come up a long way. Yet, many landlords, unaware of the situation keep charging rents a lot below market standards. I know a few people who are happily paying meagre rents praying each day that their landlords do not come to know of the existing market rates.
This is not the only aspect which a landlord should be informed about. In addition, he should know everything about the tenancy agreement, history of rent payments, council compliance reports and so on. The job is willingly undertaken by a property manager if you have employed one. If not, it falls within your ambit of diligence. Let me take you through a few facets of landlord-ship.
Lending institutions are there for a purpose. It is their duty (and their business interest too) to forward us loans. However, it is not their responsibility to tell us what loan arrangement may suit us best. Thus is it important to conduct one’s homework and be as inquisitive as possible when dealing with banks and other lending institutions. Let me try and focus on a few areas which buyers will do well to be informed about.
Focussed property investors always keep an eye on capital gains and rental yields. How much does a capital asset increase in value over time cannot be estimated right at the outset. However, you will invariably be rewarded with capital gains if you buy your investment property in right location and in historically strong areas which also fall within the ambit of active town planning for future.
Michael Yardney, while writing a piece for the Property Update, dismisses the idea that we will have a property market bust when the Baby Boomers begin to retire. Yardney delves deep into the puzzle and while he appreciates the phenomena- which the retirement of a 5.3 million strong workforce will be- he infers at the same time that the property market will keep up with its buoyancy and there are plenty of reasons to feel so.
In a recent article for the Property Update, Pete Wargent talks about the boom in dwelling constructions in Sydney. I ditto his opinion that the construction frenzy is a certain cause for cheer for the RBA. After all, the plan to bring down cash rates was meant to pep up dwelling constructions in the first place. If you are a buyer, ready to play the waiting game, Wargent does not mind you buying into these new dwelling units but what does he propose for the investors?
