Life? Pah! You’ve got it nailed. You are sorted. Done. Problem solved; everybody move on. You’ve got your finances in order, you’ve invested in real estate, and you know exactly how your life is going to turn out.
Then, it happens. You wake up one morning, pull back the curtains, flick the TV on to the news and then…
Property Price Crash!
Real Estate Values Plummet!
It’s The Global Financial Crisis Part 2: This Time It’s Going To Really Hurt!
And it’s all gone, just like that.
Now, those are the external forces that can ruin your property portfolio. To an extent, you don’t have any control over them. Markets twist, dip, rise and fall and all you can do is ride the wave and pick your moments. They’re acts of God and bankers; not something for us mere mortals to comprehend.
But your property investments can go up in smoke in other ways – ways that you can control. You can’t fight against investment issues that are outside of your control, but you have to make sure that investment’s as sound as it can be. This strategy both protects it in and of itself, but will also help to weather an economic storm.
Maintenance Loves You, So Make Sure It’s Mutual
When you buy a property for the sake of either renting or using as part of a portfolio, it’s easy to forget that you have it. It’s just there, out of sight and out of mind. You probably treat it in ways you would never dream of treating your home.
Make sure every single dwelling that you own regularly goes through a health test. It doesn’t matter if it’s rented or sitting vacant; if it’s in a bad state of repair and you plan to renovate it someday. Run it past a home inspector, make improvements where needed and always run regular checks.
Not only does this keep everything looking good for the sake of your investment, but it will save you time if you decide to sell. The groundwork will already have been laid, so you’ll have it on the market quicker.
Check The Alarms Work
Hopefully, you will have a dutiful tenant who will inform you of any issues. But many tenants don’t like to tell their landlord there is a problem for fear of recriminations.
Make six monthly checks that the fire and burglar alarms work. To go the extra step, get it written into the rental agreement that the renter has to inform you of any mishaps within 28 days.
Don’t Borrow Against Existing Properties
It’s tempting to use properties that you already own as security. It might be for personal reasons, or to guarantee a loan on a renovation you have planned. Don’t do it. Think of it as like borrowing from your pension when you’re 45; you just wouldn’t do it. It might save short-term hassle, but it’s not going to be worth it in the long run. Financing investments with other, unstable investments is a surefire way to bringing down the whole house of cards.