Investment properties come in all shapes, sizes and conditions. There may come a point where its time to let it go, as a landlord it’s important to recognize this point. When your property begins to cost you more in maintenance and repairs then the return in rent its time to weigh up your options to get yourself back into an effective business venture.
Your investment property is a business, there are outgoing expenses and incoming funds, this is a balance throughout the time you hold the property however you want to make sure it is worthwhile by producing at least more income then expenses in the long run.
Remember be objective, the significant value you may hold for the property will not be seen by others. Think about the reasons why you invested in the property to start with, was it to make use of a family home you couldn’t part with? Was it to generate some income for you? Are you trying to hold on to it for a strong selling market?
Why not sell?
Selling your investment property could be a good option for you particularly if your property is on a large block of land. Land is often sort after and with the new home owners grant offering the most money for first home owners who choose to build you may find people very interested in purchasing.
Develop & build
How about demolishing the old run down home and developing? It’s very much becoming the norm for homes to be on small blocks. Knocking down and building a few smaller units may offer a larger return then finding a tenant who will want to rent one older house.
Renovate to increase rent return
Reno’s? It all depends on run down your property is. Some are just not worth saving, weigh up the time and money it would cost in comparison to the rent you may receive in the future. Kitchen, bathrooms and flooring are the biggest areas scrutinized by potential tenants so focus on those areas if you are to renovate. You can increase your rental return with inexpensive renovations.
Ensure you listen to the market, if you are not getting potential tenants through your property or receiving bad feedback from them this could be a prompt for you to do something about it. If people don’t want to live in your property then it is going to make it difficult to receive income from it.
Get advice! Sometimes having a second pair of eyes to look at your property may show you more than what you see. Have a professional look over the place or friends tell you what they really think about the condition and whether they would live there.
Know when the investment has started working against you and move onto your next venture.