Owning investment property means taking on a lot of responsibility, whether its through debt or managing your portfolio, the responsibility falls on the owner/landlord.

When it comes to debt, everybody’s risk factors and structures are very different to another persons, so don’t follow the crowd, set your structures up to suit your own personal circumstances.

Target on a specific area that you can research indepth before taking the plunge, if you try to target a number of areas at the same time you will get confused as to how much property is actually worth in that area, how much the rents should be and how much they would resell for. This could end up costing thousands of $$$$$’s as you may think what you are buying is a good deal and its actually not.

Be smart when buying property there should always be something in the deal for you (i.e equity) otherwise you have to question whether its really worth buying. Look for a twist to the property that everybody else has overlooked, go into buying property with an open mind and lots of vision – this vision could make you thousands of $$$$$’s.

It doesn’t matter whether the property is going to be your own home, an investment property or a property you are going to onsell – unfortunately money needs to be spent on them – so if you don’t want to spend money, don’t buy them and let the serious investors snatch them up.

Spending time and money on your investment properties can pay off you just have to look at the big picture.  I come across alot of landlords that invest in property and they just don’t want to put their hands in their pockets, this tells me that they have total disregard for the properties themselves and also for the tenants living in them. Its funny because we all spend money on ourselves like buying a new dress, having a hair cut, a massage or a new handbag but landlords don’t spend money on gutter cleans, chemwashing, chimney sweeps etc and we are talking about something that’s worth thousands of $$$$$$’s.

A well presented property attracts a different type of tenant that is willing to pay higher rents than everybody else, the tenant knows that the landlord maintains the house regularly and they are not going to have a constant battle trying to get them to fix something. Whenever I buy an investment property I always stand back and look at it carefully – I question myself ‘would I be prepared to live in this property’ and if I wouldn’t then why would I expect somebody else to pay to live there?

This smart landlord spent approx $25k for a full interior and exterior renovation on a home and income in Manurewa (3 bedroom house, 2 bedroom minor dwelling and double garage) a majority of the work was carried out by the landlord. The landlord gained quality tenants renting the 3 bedroom house at $455 per week and the two bedroom minor dwelling at $380 per week, recent valuations showed that due to improvements and capital growth the property is now worth $530k.

If regular inspections are done on the property (which will be every month) the landlord can keep a close check on how the tenants are looking after his investment and if any problems occur he can act on them quickly.

The landlord now has a cashflow positive property, a property that won’t need renovating for another 6 years and the ability to pull the equity out and purchase more investment properties

The best time to carry out improvements on your investment properties should either be when you first settle on the property (you can only do this if the property is already vacant or you have asked for vacant possession) or in between tenants vacating – DO NOT ever renovate a house with tenants living in the property, it doesn’t work. The reasons why you wouldn’t do this are as follows:

• It will end up costing you extra time to complete the renovations
• Could damage the relationship you have with your tenants
• You could end up in tenancy tribunal (previous experience with tenants accusing contractors of stealing their belongings)
• Would have to offer the tenants a reduction in rent for disruptions
• Tenants after a while start refusing access to the contractors – or make it very difficult for them

Offering a quality product on the market rather than a substandard one will allow you to ask for higher rents, you will attract quality tenants and have the ability to revalue the property for reinvestment purposes six months down the line.

Remember when carrying out substantial renovations to your properties take photos before you commence any works, keep in your file and present to your accountant at the end of the financial year to decide whether the expense is a capital or maintenance expense. It also helps that the renovation costs are fully broken down and I mean fully broken down. Fifty small figures is easier to put through the books than four large figures!!