4 Ways To Stay Focused And Avoid Financial Pitfalls In Your Portfolio
As a property investor, there's a lot you need to manage every day. While your property manager will likely take care of most of the everyday administration of the property, there are a few key things you need to do for your portfolio to be set up for long-term growth. Here are 4 things you need to do to stay focused and avoid financial pitfalls in your portfolio.
Be diligent with maintenance
It may be tempting to hold off on replacing the old oven or dishwasher that continually breaks to save money, but it could turn into a costly problem later. When you purchase an investment property, set up a regular maintenance schedule with your property manager and/or accountant. Having a regular maintenance schedule for your included fixtures and furnishings, routine inspections and exterior property maintenance will keep your property in good condition. Keeping your property in good condition is also crucial for attracting quality tenants who pay their rent on time.
Decide between self-managed or professionally managed
Fancy managing your portfolio yourself? When you're making this decision, weigh up how much time and energy you're likely to spend on managing your portfolio and if this is something best left for a professional. Sure, if you have the time in your week self-managing your property may work for you but if this is something you know you won't be diligent about, the property management fees will outweigh problems as a result of poorly managing your properties.
Focus on your portfolio's individual needs
When the recent mining boom happened in Queensland, some investors entered this market at the height of the boom. Unfortunately, at this point, there was only one-way property prices in these regions were going. When particular regions or cities are growing rapidly, make sure you seek the advice of an experienced professional and objectively weigh up if the investment will be reflective of your long-term investment goals.
Play the long game
This builds on the last point. When you set out building your portfolio, understand that property is a long-game. Yes, we've seen people make astronomical returns in Melbourne and Sydney in recent years but buying in the hope to flip the property for a profit in a few years could be futile unless you have a specific and tested strategy. Property investing, in general, is something that requires a long-term focus. Make sure you determine your long-term goals with a trusted advisor when you first establishing your portfolio. With a long-term strategy in place from the outset, this will give you something to guide your decision-making for future investments.
Property investing is an excellent vehicle for building long-term wealth. Make sure you're making decisions for the benefit of your individual portfolio and surround yourself with experts who you trust.