If you plan on investing in property in Australia, use a unique, powerful method that will assist you in building a multi-city portfolio of properties from one location. Having a portfolio that is geographically diverse with different categories of property will reduce your risk and maximise the profitability of the properties you purchase throughout the country.
Wise investors are aware that economic conditions vary from one city to the next, which creates up-and-down cycles of real estate activity. In addition, each state and territory in Australia has its own rules for levying taxes on an investment property’s unimproved land value. If all of your investment properties are located in one state, you could exceed the established land-tax threshold and end up paying a considerable amount in taxes.
Keep in mind that an investment property interest held by a lessee through an operating lease is only classified and accounted for as an investment property when all established criteria have been met.
After you purchase investment property in Australia, you can either manage it yourself or hire a management company to do the job. It is best to base your decision on the amount of time you have at your disposal and the enthusiasm you feel for ensuring that the investment rental property is being managed properly.
If you decide to hire a property management company, they will do the job for you approximately 5% to 8% of the gross rental collected. The fee you are charged may be based on several factors, such as your location and the number of properties to be managed.
There are two main categories of property management charges: letting fees and management fees. As a rule, the latter cover mailing statements to tenants, routine checks and regular maintenance. Letting fees cover the expense of finding tenants for your investment property, such as advertising and dealing with prospective tenants.
Some investment property companies also charge extra fees for completing reports, conducting inspections, placing advertisements, mailing statements and other services, especially if the applicable letting fee is lower than the average charge. Finally, in order to be happy with your choice, look into the reputation and experience of your property management company, and determine the total cost of the combined fees for one year.
