Investors Refusing Urgent Repairs Could Pay More
Source: Best Practice

It is not only tenants who have to abide by the rules regarding the leasing of residential property. In Australia and New Zealand , landlords too are bound by residential tenancy legislation.

For example, in NSW landlords have to keep the property in good condition, they are obligated to lodge the bond with the Rental Bond Board, and there is a limit to the amount of bond that can be charged.

Most tenancy agreements state that the owner is obliged to conduct 'urgent repairs' as they arise. Urgent problems are usually defined as those that radically reduce the tenant's ability to live in a property, such as a dangerous electrical fault, or serious infestation leading to large-scale structural damage.

A rental property owner who does not see to urgent repairs is asking to pay more for repairs in the long run as tenants have the right to hire qualified trades people to carry out urgent work and send the bill to the owner of the property. It is unlikely that a tenant will shop around for the best price, since ultimately the cost is legally payable by the owner.

Devising An Investment Strategy

Most financial advisers suggest that when investing in property, you should think long term. This means not selling your investment property for 7 to 10 years, the average length of the housing cycle. Well selected residential property should double in value over this time period.

But you must always consider your assets, including your cash reserves and the proportion of your current home you own. What impact might the birth of a child have on this investment plan? Does it mean a lot to you to have an overseas trip in several years time?

To make the most of your investment, you should aim to borrow some or all of the purchase cost. This is called leverage: using the 'lever' of credit you can make a much more substantial investment and, in the end, reap much greater rewards. Financial advisers may recommend that you follow a long-term goal of building up a property portfolio, where the rewards from your first investment are ploughed into buying a second investment property, and so on until you own a substantial amount of real estate.

One way to build up a diversified investment portfolio at a reasonable cost could be through a property trust or a syndicate. Both of which give you a stake in the real estate market at a low starting cost, and without the burden of maintaining and managing a property yourself.

A property trust owns and manages a number of investment properties for its unit holders

In a syndicate, you own the assets directly, and have a degree of control over which properties the syndicate invests in.