How to always have a tenant in your Rental Investment Property?

Many people are scared of investing because they think it will be hard to always have a tenant. It's like trying to beg a dog to stay, but is it?

1st mistake people make - Most people that invest in property get emotionally attached to it instead of treating it like a business.

For example: Let's say you own a fruit shop and your oranges are selling at $2 a kilo. But for some unknown reason they are not selling at all and you don't know why.

What would you do?

Then you find out that the fruit shop just down the road is selling his oranges for only $1.60 a kilo.

So tell me... wouldn't it be business sense that you reduce your prices or promote why you oranges are so good?

That's exactly how rental investment property work - I know you can rent out anything at the right price! I personally have never had any of my Investment Properties without a tenant for more than 2 weeks. Let me tell you a true story about what happened to me 5 years ago.

I purchased a refurbished 2 bedroom unit in Altona Melbourne, over the phone. Yes, I purchased it over the phone!

Most importantly, I knew all about this Investment. It met all the criteria's of a good Investment (we have a 30 point criteria check list before we recommend any property to our clients).

The Investment, plus costs (with all loan costs, stamp duty etc) =$205,000 Interest rate = 7.5% Monthly Repayments on Interest Only Loan=$1,153 per month

So, if I did not have a tenant, my cash flow for the month would be minus $1,153.

Yes, I can claim it all on tax but my cash flow is affected so this is what I did to make sure a tenant was found straight away.

There were 12 units in the block ready to let at the same time, with the recommended rental of $175 per week. I told my property manager to rent mine out at $10 cheaper than any other 2 bedroom units in the block.

Guess what? My Investment was rented out that week!

Too many Investors get emotionally attached to their Investments - don't let this happen to you! You must check what properties like your investment are renting for in the area. Sometimes you may be out by just $5-$10 per week, so do some homework.

The great thing about this homework is that it will only take you two hours or less.

When I perform my six month reviews, I cover this subject in detail and actually help my clients through this process. When a client comes to me saying their investment is costing them more than what we estimated at the beginning, I always find the reason why.

I guess its human nature that we personally analyse and think about what is best for us. I will work and set up a client with everything they need to know to be successful and then they talk to their well-meaning relatives, neighbours, plumber even postman! I've even had Bank Managers and Accountants ruin it for my clients.

I believe that if I want advice from someone, I hire people trained and experienced in that field, just like repairing a hot water service.

The other day our hot water service stopped working and I went outside to have a look at it and then I just realized I did not have a clue what am I supposed to be looking at, I was just looking. Then I came to my senses and looked up Hot Water Service repairer in the directory, and had plumber to tell me what to do step by step.

When you are dealing with Property matters, make sure you deal with legitimate and professional experts who do this everyday, not some-one that has done it on the side or knows someone that has done it.

The idea when investing in a rental investment property, "the right way", is to make it easy and comfortable for you so that you can build a portfolio, not safe guard one or two investment properties.

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Wishing you all the success,

Dino F. Livanidis,
0418-872280,
www.npis.com.au

NPIS teachers people how to Invest in property the right way, get your Free report "The Ulitmate Guide To Property Investment" and also get free tips weekly on everything you need to know about, Property Investment, Taxation, Finance and much much more, go to www.npis.com.au to sigh up now.

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