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The best known form of income stream from property is rental. There are others, like agistment for rural properties, venue hire, licensing users of land, etc. Rental, however, is the most easily defined version of the issues related to creating income out of your property. Property investment needs to be cost-effective at all levels, and your rental income stream needs to be managed well.
The theory of rental varies, but the core process is periodic income over time. The real issues is value.Time really is money in property investing, and on principle, investments should pay their own way. This is a measurable process, it can be defined in hard dollars, and there’s really no excuse for getting it wrong.
Rental Don’ts
The “Don’ts” of rental are really an exercise in avoiding massive property management mistakes. Sadly, the fact is that rental is too often viewed as a “cheapskate” moneymaking exercise, not in its correct form as capital management. Dumb landlords allow their properties to fall to bits, collect rent while “saving” money on maintenance- And find themselves faced with a massive cost when they want to sell. Rental, like all other types of income, is based on what others are prepared to pay. Lack of maintenance will definitely turn off potential renters who’d pay more. It may also drive out paying clients, creating a hole in the income stream. This is a classic own goal scenario, and it highlights the vast range of potential mistakes for investors in terms of making income which can be defined in one sentence- Asset neglect. Another description would be “asset suicide”.
So don’t do these things- Pay attention to the state of your assets and make sure your income stream from your properties is healthy, not comatose.
Rental Do’sThe “Do’s” of rental are exercises in asset development. You can turn a weak asset into a very strong asset quite easily with planning and good property management techniques. The fact is that it’s possible to create excellent income streams from investment properties simply by upgrading the properties. A building earning $5,000 a week rent can make $10,000 a week, if you make it worth it to the renters.
Best practice rental Do’s include:
– Proper maintenance- Your asset should be in very good condition. This will save you a fortune down the track, and add value to your rental prices.
– Upgrades- Where financially viable, upgrade the properties systematically. Get rid of old wiring, plumbing and other foreseeable future costs ASAP.
– Marketing- You should try to upvalue your market appeal to get better tenants and better rental values. This includes good property presentation, security and other amenities likely to get better prices, as well as adding value to the property.
The best property investors treat every investment property like a jeweller treats gold. They present it in the best possible light, and cover their current and future costs scrupulously. They also get the best rents, and it’s no coincidence. Take care of your assets, and they’ll take care of you.
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