Blink Property
It’s been a rollercoaster year for landlords, with plenty of ups and downs.
Your success may have varied, depending on how many properties are in your portfolio, where they are located and how much debt you are dealing with on them.
Rental returns have soared across most of the country, but so has the cost of everything, especially the interest rates you are paying to service your loans.
You may be ready for the Christmas break and a fresh start in January, but how can you plan now to get the most out of your portfolio in 2024?
Think about your portfolio’s performance this year. Have you learned from any mistakes that could improve your future outlook? Was there anything you could have done differently to save money or boost equity and returns? Did you miss opportunities that you want to make sure you seize next time?
Did you stick to your overall long-term strategy and keep your end goals in mind?
Many things happened to make it hard for investors to hold their nerve. And data shows many exited the market. Perhaps their increased mortgages were too difficult to service, or they were spooked by threats to raise taxes on landlords by various state governments.
So if you stayed on track, well done. If you stepped away from your strategy, think about where that got you and whether you would act differently next time.
Time to perform a financial health check on your portfolio. Do you know the current value of each of your properties?
Revaluing or refinancing your properties could mean freeing up equity to use for a deposit on your next investment or a much needed renovation. One of your properties might be at the absolute top of its growth cycle, which could mean it could be sold to pay off other debts or leverage into new assets with upside.
Now, are you on the best loan rate deal possible? Recent value increases might have improved your loan to value ratio and given you more bargaining power for a better deal from your lender. Or, you might consider refinancing to a different lender with a better deal or bonus offer.
Finally, are your properties all commanding market rent and, if not, when are the leases winding up so you can look at a rent review? Staying on top of this space is essential, especially if you have multiple properties. An increase of $50 in rent per week can become $500 if you have 10 properties…that’s more than $25,000 extra a year.
It’s worth re-educating yourself by engaging with the professionals that helped you get where you are. Touching base with your property managers, accountant, mortgage broker and buyer’s agent can help you identify opportunities for the new year and make sure you’re across the latest news and developments in each of their fields. For example, an accountant might be able to tell you about tax legislation changes coming into existence at the end of the financial year. Knowing about those now would give you enough time to make decisions to prepare.
Likewise, property managers will be able to tell you which locations vacancy rates might be shrinking or rising in.
It’s also a good time to take stock of what repairs, maintenance or improvements might be needed at your properties.
How many repairs caught you by surprise last year and how much extra did they cost you in callout fees?
Catching future problems at an early date rather than spending on emergency repair callouts when the damage is already done can save you a lot of money.
For example, you might find a hot water system upgrade is cheaper to get done in the warmer months than waiting until winter when there may be a backlog of jobs and fewer tradies available.
Identifying a list of jobs that need doing and getting them all done at once can also mean you save money on multiple callouts at a later date.
