Most successful residential rental property investors will tell you that becoming successful and maintaining that success requires a sequence of great habits that keep the property in check, and on its way to creating great long-term profits. Here we’ve outlined what you need to know to be successful.
They Establish A Business Plan To Achieve Goals
Successful investors approach their properties like a business. Creating and implementing a business plan to establish long-term and short-term goals helps them visualise and focus on the big picture. Rather than seeing a big price tag, a business plan helps the investor calculate the cost, payback period, and estimated return-on-investment, encouraging them take action to achieve higher rents and more profits long-term.
They Keep An Eye On Market Trend
New Zealand’s dynamic market provides plenty of profitable opportunities for investors, but only if they know to look. Don’t just rely on the media for information, stay ahead of the herd and keep an eye out for market updates. Understanding market trends, population growth in areas, general incomes, affordability and lifestyles enables you to understand current conditions and predict trends, creating opportunities for a prepared investor.
We regularly post market updates on our blog to keep you informed on the latest market changes and trends in Wellington, including the number of properties advertised for let on Trade Me, which a good supply and demand indicator
They Maintain A Spreadsheet
A simple spreadsheet keeps you on top of rent arrears, maintenance costs, endings of tenancies, helps you measure the financial success, and reminds you when the rent can next be increased, helping create a less stress and a more confident investor. Something this simple should never be forgotten about. Too often we hear about landlords who let rent arrears get out of control with thousands owed because they didn't keep an updated spreadsheet, showing they can be fundamental to creating success.
They Keep A Copy of The Residential Tenancies Act
The best way to avoid the Tenancy Tribunal is by understanding your rights and obligations, as well as the tenants. A successful investor should have a copy of the Residential Tenancies Act on hand as a point of reference, as this act can quickly become pricey for unprepared landlords.
They Conduct Regular Inspections
A successful investor never underestimates the importance of regular inspections. Inspections are fundamental to keeping an eye on the condition of the property, and ensuring no long-term costly damage has occurred.
They Respect The Property
Maintenance is key when wanting to attract reliable tenants and can significantly increase the rent value. A fresh coat of neutral-coloured paint, plus updating door and cupboard handles can also help freshen up the property, helping improve the longevity of your tenancies and its profitability.
They Know What To Invest In
Successful people aren’t afraid to spend money to increase profits. Being strategic is key when investing in properties. Spending an exorbitant amount isn't necessary to achieve this, but strategically investing into your property can be considered essential in creating significant long-term profits, and attracting a more profitable, reliable tenant. Consider installing a heat pump and insulation, as this can allow you to significantly increase your rental income, allowing a shorter pay-back period and long-term profitability afterwards, while also reducing future maintenance needed.
They’re Not Afraid To Alter Their Objectives If Need Be
Successful investors have learnt to measure, modify and achieve objectives as their circumstances and investment changes. Market changes do happen, sometimes to the investor’s benefits, other times not. To make sure your financial performance is measured efficiently, ensure you keep on top of market changes and alter your objectives if need be to what your new targets should be. This can help you make better, more informed strategic decisions that can help improve the long-term profitability of your Wellington investment property.
A great investment in Wellington relies on continual strategic decisions based on your objectives and the market condition of the area. Try using these tips to help you become a successful investor in Wellington.
One Last Thing
Regularly finding out what rent your rental property can achieve and how it can be cost-efficiently improved to create better return is way to become a more successful investor. You can find the right rent and take advantage of our expertise with a Free, No Obligation Rental Appraisal. Feel free to get in touch and arrange and appraisal today.