5 Steps to Becoming a Landlord

The thirty percent of Australians who are renters is forecast to rise to forty percent as homes become less affordable. This is good news for property investors because maintaining a good occupancy rate is crucial to your success.

STEP 1 - LOCATION
For a successful investment, you must buy in the "right" location with its long-term viability in mind - in both terms of good rental potential and capital growth. Check for proximity to transport facilities, schools, shopping centres, sports and entertainment facilities and areas of future jobs growth. The property needs to be located in a safe, clean, attractive environment and the area will already have an established high rental demand.

STEP 2 - BUY AN AVERAGE PROPERTY
The building must be appropriate for the market - for example, with at least three bedrooms if located in a family rental area, or with some security if inner-city high-rise. It should be well-built, low maintenance internally and externally viz. gardens. If it is a medium density dwelling, make sure it is large enough to meet the approval of your bank or lending institution.

STEP 3 - GROSS VERSUS NET RETURNS
A typical well located property will return around 5% gross. You've collected your rents (gross) and from that you'll pay around 25% in outgoings (rates, management, insurance, body corporate fees, repairs); that will leave around a 3.75% net return (yield).

STEP 4 - VACANCIES
To make property investment work, long term, you need 2 key factors to persist; a tenant and your job. If you have a well kept, appealing property in good condition and in the right area it should not be vacant.

STEP 5 - WHY DO PEOPLE FAIL
• The property is in an area of low population growth potential.
• The property is too high maintenance.
• The rent is too low.
• Vacancy periods are too long or too many.
• The loan taken out was structured wrongly.
• Some tax deductions are missed.

Article Source: http://EzineArticles.com/?expert=Neil_Handley

About the writer -----------------------------------------------------------------------------
Neil Handley graduated as a Bachelor of Economics and Accountant. After some 20 years as a stock broker Neil turned to property development. He then acquired a controlling interest in a property development company listed on the stock exchange and became CEO. He has been involved in developing residential subdivisions, industrial subdivisions,shopping centres, office buildings and medium density residential dwellings in Sydney's north shore, Northern Districts, Parramatta and Liverpool areas and on the Gold Coast, Queensland. One office building was sold to the AMP for $25ml. Neil's company advises on building wealth via property.
Go to http://www.specialstrategies.com .

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