August 2012 How to Become a Super Investor . Many investors get stuck on one or two properties and fail to progress up the property ladder. They probably know in their hearts that they’ll need to build up a bigger portfolio to have a hope of achieving financial freedom. How to Become a Super Investor Investment Corner How to Become a Super Investor Cont. You might’ve read several property books or magazines and been to a couple of seminars to get the basics, but things still aren’t quite progressing. You might feel like there are missing pieces to your property jigsaw puzzle. Ellen's Insights: Mo'Maintenance, Mo'Problems You’ve seen stories about really successful investors buying five, 10 or even 20 properties and wonder if it’s really possible. Perhaps you feel like a bit of a failure and get worried that things will never come together. Your friends and family might even be assuring you it’s not the right time to buy, or talking about how uncertain things are. You might’ve even read about how the resources boom is over. Then several bills arrive, you find the hot water system in your investment property has just blown up and that the tenants in the other one are leaving. Whatever your circumstances, the super investor takes a different approach to the herd. See page 3 for five things that super investors do to make it happen. ...Continued Page 3 Adelaide Metro Property Management Phone: Fax: Email: 08 8269 1833 08 8269 7903 [email protected] 55 North East Road, Collinswood SA 5081 www.ampmadelaide.com.au Investment Corner Unley $750,000 to $790,000 Northgate $550,000 to $570,000 63 Arthur Street 34 Bradley Terrace High Quality Contemporary (Circa 2000) Crows Urban House at Lightsview Beautifully built split level home on 358sqm, boasting large main bdr with w.i.r, ens, priv balcony, 2nd & 3rd bdr with b.i.r & priv alfresco entert area, frml lounge, o/plan living/dining, modern kitchen, large bthrm, sep laundry & spac under croft dble gge & large court yard. Exclusively designed for the Adelaide Football Club, currently under construction by Rivergum Homes. 3 Bedrooms with WIR and ensuite to main, o/plan living areas & stylish interiors, outdoor entertaining & all fencing/landscaping included. 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Alex Ouwens 0438 422 975 Daniel Harris 0400 455 392 Alex Ouwens 0438 422 975 Daniel Harris 0400 455 392 SOC3238 RLA241337 SOC2996 RLA241337 How to Become a Super Investor …Continued from Page 1 Value your time The super investor understands the value of time. They realise it’s much more valuable than money. You can’t get time back. Super investors use property investment to “buy” more time. By investing in property now, you are investing in your own financial future that will give you more choices about work and lifestyle. Have a strategic mindset How you think about yourself and others plays a significant role in how things turn out. Are you a glass half full or half empty person? I always suggest people plan for the worst but expect the best. You do need both types of thinking to be a super investor, but it doesn’t mean you should mope around the house with a worried expression all the time. The super investor engages in strategic thinking, researches extensively and considers the long term Take action To be successful in property, you not only need the knowledge but also the courage to take action. Knowledge is not power unless you use it. Most people that go to seminars and read books don’t do anything. They gain the theoretical knowledge, but very few use it. Have a system Abraham Lincoln said, “If I had 8 hours to cut down a tree, I’d spend the first 6 hours sharpening the saw.” The same applies to property investors – getting the right systems and strategies are key. Super investors repeat what works and refine what doesn’t. Use a team of experts The super investor has quickly discovered the power of leveraging experts. Trying to do everything yourself will only tie you up in knots! A critical person on your team is a licensed buyer’s agent. They can help you develop a strategy that’s perfect for your personal situation. They’ll quickly shortlist the top suburbs for growth or yield using sophisticated research tools and can uncover off market deals, new listings and hot properties through their established networks. Set goals Super investors love setting and achieving goals. It gives them a sense of purpose and destiny. They’re not constrained by small level thinking – they’re motivated and energised to achieve worthwhile goals. Most of the people on the BWR Rich 200 List are people who’ve worked hard, saved and invested in growth assets long enough to enjoy the benefits of goal setting. Rich Harvey Rich Harvey is an economist, investor and the CEO and founder of www.propertybuyer.com http://www.apimagazine.com.au/blog/2012/08/how-to-become-a-super-investor Ellen's Insights: Mo' Maintenance, Mo' Problems There are a lot of things I would do if I had a crystal ball. Actually, I’d probably just want Saturday night’s lotto numbers but I’m sure I would be magnanimous enough to let you know when the oven in your investment property was going to stop working so you could be prepared! We’ve already looked at some of the seasonal aspects of maintenance this year, but there are stages of a tenancy when you may expect a higher than usual amount of maintenance to be reported. The start of a tenancy is when most ‘teething issues’ tend to show themselves. When a tenant views a property they generally are not able to check things like water pressure or whether all of the lights work. Often these issues are reported when the Ingoing Inspection Report is returned to the office or at the first routine inspection. These issues can range from cupboard doors being a bit hard to close to the hot water service not working as well as it could. I often attend a property for the first inspection in a tenancy and find that a tenant has reported several ongoing issues that a previous tenant never mentioned. This comes down to different people’s tolerance levels of what they are willing to live with and what they feel needs to be repaired. If it is a general quirk of a type of property (for example, the same crack opening and closing over the course of the year, or low water pressure with a gravity-fed hot water service), and the tenant is home, I will try to explain this to the tenant so they are aware that it does not necessarily require repair. Over two different tenancies in the same property, disparate amounts of maintenance may be reported. The reasons for this are myriad. Some people are happy to attend to minor things like leaking taps themselves while others do not have the time or know-how to attend to these items and will report them to their property manager instead. During the tenant selection process, your property manager may advise how particular a certain applicant has been during this process and this may be an indicator as to how high-maintenance they may be during their tenancy. You may also find an increase in the amount of maintenance reported at lease renewal time. This is often due to a mentality of ‘if I have to pay extra rent, I want a working heater’. I find that this comes to the fore after a large rent increase. Many tenants have told me that because they know that they are paying reasonable rent for the calibre of property they are living in, they don’t want to bother their landlord with maintenance requests that may cause a larger rent increase later on in their term. However, if the landlord does not stick to their side of the hypothetical bargain, they want to get ‘value’ for the money they are paying in rent. At the end of the day, you as a landlord are perfectly within your rights to raise the rent of your investment property; however, I strongly suggest taking note of your property manager’s recommendations. Your tenants are also within their rights to live in a property that is in a good, liveable condition, and this means having appliances in working order. As I’ve mentioned before, having an emergency fund set aside can help take the sting out of the costs of larger repairs. If you would like to discuss any ongoing maintenance items at your property, please contact your property manager.