In order to make your investment properties make profit to you, you’ll have to learn how to protect and manage your property effectively.
Let’s start with the property protection;
A property can be protected by insurance company, personal savings for emergency needs and regular maintenance work.
No matter you buying a property for personal or investment uses, it is a must to have at least a fire insurance policy to protect your asset. Besides, you may also need to consider to buy a Mortgage Reducing Term Assurance (MRTA) or Mortgage Level Term Assurance (MLTA). The both insurances are designed to provides funds to pay-off the remaining mortgage/ house loan if the borrower death or suffers from total permanent disability (TPD). Therefore, the borrower’s family will not lose the house.
While for investment property, having a fire insurance policy is compulsory but the MRTA or MLTA is optional. For land, no any insurance policy require as it can neither be destroyed nor recreated.
➋ Personal savings
Although you have get the finance from bank to purchase a house, but still, you’ll need to save money for emergency uses.
As a property investor, you shouldn’t put your all eggs into one basket, always save a little more money for contingency uses. Besides, keep in mind that, don’t work for money, let your money and other people’s money work for you. (Since you borrowed money or other people’s money (OPM) to bought an investment properties)
On the other hand, what will happen to your properties and financial when you have passed on? It is advisable to have a well planned and written “will” to protect your investments and ensure that they will be passed to your chosen beneficiaries.
➌ Property maintenance
It is compulsory to run maintenance work on each of your investment properties regularly. Check the piping and drainage for any leakage, electrical wiring and also see if any paint work is required. Always keep your properties in well conditions. While for landed properties, you should have run anti-white ants spray every six month.
Next, let’s us show you the tips for effectively managing the properties;
① Invest in right property and right location
Different types of properties attract different kinds of tenants. For instances, tenants who are the group of middle or lower income may prefer apartments; group of young couples, professionals or expatriates may prefer condominiums; higher income groups may prefer landed residential properties. Therefore, before buying any investment properties, determine which type of tenants suit to your investment portfolio.
Besides of that, different locations also attract different categories of tenants, such as, properties near school, university or college attract students and lecturers; property near industrial area attract workers and expat professionals.
In addition, make sure your investment properties are in the vicinity of your living place. So you can get to the destination quickly if there is any troublesome on your properties or tenants.
② Find a good tenant
This is extremely important to have rent your property to a good tenant. What determine that is a good tenant? pay rent on time, take care of your property on behalf, follow the rules and won’t give you any troubles. How can you find a good tenant? You may need to consider to adjust the rental slightly lower than the market price, but it doesn’t mean you should not increase the rental in the future.
③ Tenancy agreement
Before the tenants move in, make sure they had signed the tenancy agreement and paid you one month’s rental deposit, half month’s utilities deposit and first month’s rent.
In the tenancy agreement, make sure you have clearly stated that the tenant must bank-in the monthly rent to your bank account within the deadline of the month.
Property investment can be simple if you protect and manage your property effectively.
Source: WMA Property